Will Pakistan Tourism Benefit | The New Emerging Market Post-COVID-19 Pandemic

Written By Moazzam Ali Khan

Former Chairman

Pakistan Hotels Association

The worldwide outbreak of COVID-19 has brought the world to a standstill, and tourism has been the worst affected of all major economic sectors. This is a very sensitive situation of uncertainty.

In Pakistan, this has affected even more as this sector has never been taken seriously ever since the inception, fortunately, since the new government took over, the people associated with this Industry started getting virtuous vibes from the leadership that perhaps due recognition will be granted to this multi-million dollars Industry.

Now that the combat against COVID – 19 will soon be coming to an end, having given colossal losses globally, it is time that we gear up ourselves now in the recovery process as soon as possible. There is a saying that after every such catastrophic situation, opportunities evolve and those who make smart moves can easily capitalize on the opportunity. We should not forget that after this COVID – 19 pandemic, new markets will emerge globally, with totally new strategies of businesses. Each country throughout the globe will get its market share, now again depending on their marketing strategies. There will be big-time competition for getting a fair market share.

Just to have a quick look at the losses Tourism Industry suffered in the past few months, these figures have been compiled by the World Tourism Organization (UNWTO).

These figures of International Tourist Arrival are based on January to March 2020, as compared to last year same month is as follows:

The Further Break Up By Region is –

The overall losses are estimated by UNWTO as follows:

• It is estimated that there will be an overall drop of 60 to 80 % of International Tourists going to different tourist destinations of the World.
• In terms of numbers, it is estimated a loss of 850 million to 1.1 billion International Tourists.
• In terms of revenue, there will be an estimated loss between US $ 910 billion to US $ 1.2 trillion, until the end of this fiscal year.

Unfortunately, no authentic tourism revenue growth data is available for tourists coming to Pakistan, and whatever is available is not updated, as per CEIC which navigates global macroeconomic data, used for business decisions, economic analysis, long term plans, and more. This portal indicates data up to 2018 and it shows that in the year 2018 there was a dip in revenue as compared to the previous year by (-5.5) percent and the previous year 2017 shows an increase of 9.5 percent. In terms of US dollars, the Tourism revenue in 2018 was US $ 818 million as compared to the year 2017 was US $ 866 million. Based on the above this year Pakistan Tourism will have a dip of at least (– 35) percent, only if due proactive actions are taken care.

As we will be entering a game-changing scenario as early as this COVID -19 pandemic goes off whether temporarily or in phases, we need to pull our socks up to capitalize our market share and if we do not act smartly and swiftly enough then perhaps we may again neglect the opportunity of our dream to project Pakistan as the most comparable destination as Switzerland of Asia.

To achieve the goal to make tourism more sustainable which can contribute immensely to the developing countries, hence sustainable development objectives are still a challenge that requires urgent attention, more specifically for a country like Pakistan, where some other factors are having destructive effects. In the recent past, we have seen some countries instrumental in destabilizing all avenues of growth in our country, whereas our country could have yielded massive progress economically. Unfortunately, our country has been used for nurturing terrorism and other illegal activities and for these activities few influential people within our country were also used for their gains, these so-called countries gushed huge funding for making Pakistan crumpled. Fortunately now that slowly and gradually things are changing in our favor in terms of the overall image, things are becoming much easier.

 But we still need reforms in our Tourism Policy; hence Government should on war footings accelerate the process.

To get into the stream of activating this important segment of revenue-generating terrain, the leadership will have to make up a mindset on the following norms:

1. Seriousness,
2. Structural Change – National Tourism Policy and New laws/enactments,
3. Image building.

Seriousness: It is very important that even before going ahead with such a plan, seriousness to be given top priority with complete determination unless otherwise, all efforts towards this will be in futility.

Structural Change: A major structural change has to be taken, the existing law related to Hotels and Restaurants, and Tour Operators needs to be scrapped, and a new laws/Acts has to be formulated.  Tourism and its allied functionaries like Tours Operators, Hotels, and Restaurants should be declared as an Industry. The current law is more bureaucratic and can provoke corruption. Hence New Law/Act to be formulated incorporating an independent Council comprising of representatives from the private sector – business stakeholders and the representative of the Ministry of Tourism, the composition to be 90% private and 10% Government. The private representatives will come through elections for a term of 5 years, the Government representative to be nominated by the Government not less than the level of Deputy Secretary. This Council to be headed by the private sector representative. It is also recommended that besides the Council which will be on a national level, each province should have a Tourism Board, again this should have a similar composition of representation from the private sector and the government.

A National Tourism Policy to be evolved, which can act as a guideline of national strategic policy, comprising regulatory and institutional frameworks, coving all aspects of Tourism, including and not limited to the following:

1. For the growth of Tourism, based on the projected influx of tourists, there will be a need to motivate the private sector to build more Hotels on International standards all over Pakistan, especially in the Northern part of Pakistan. The private sector having previous experience of this Industry should be encouraged first, however other interested companies from the business community within Pakistan or International companies can also be inculcated for this development. To encourage these investors, the National Tourism policy should comprise of some benefits like subsidies and Tax relief on imports of machinery or equipment and material. The Government to identify sites and make allotments for building Hotels all over Pakistan.
2. The Current and the upcoming Hotels should be encouraged for capitalizing their investment, hence the overall Taxation system needs to be reviewed in terms of Central Excise Duty/ Federal Tax and the Provincial Bed Tax, the Tax/Duty on imports, and the Electricity Tariff for the Hotels.
3. The Hotel room rates should have some based on a criterion, such as Type of Hotel, location of the Hotel, and the classification of the Hotel and should maintain the rates as compared to the Hotels offering internationally. These rates to be monitor by the Council and the Provincial Boards.
4. In Pakistan currently, the Forex transactions and Exchange methodology are very dubious, as there is no control over ant Forex transactions, hence to order to have a grip on it and instantly retrieval of information of the total receipts under the tourism activities, it very important that the country must have very strict rules and regulations. State Bank of Pakistan or any other monitoring cell to be formed for ensuring total compliance of the law for this important Forex generating avenue.
5. Serving of Liquor by the Hotels to the Non-Muslim travelers to be revisited for more simplified rules and regulations.
6. The National Tourism Policy to be encompassed of sufficient incentives for the stakeholders of the Industry, to stimulate the development of supply capacity in national and international markets.

Image Building:

1. The Ministry of Tourism to develop Image building plans to indoctrinate the tourist globally for removal of perception regarding Pakistan, as a lot of people worldwide has an impression that we have a lot of commotion and lawlessness.
2. The Ministry of Tourism to market/advertise globally, our Tourist Sites; vis-à-vis mountains, lakes, ocean, monuments, heritage properties from Mughal time, archeological sites such as Mohenjo Daro, Harappa Civilization, Indus Valley Civilization. Efforts to be made to develop documentaries on these tourist attraction sites and these documentary films to be shown globally in the respective local media of countries/cities where our Embassies and Consulates are located.
3. These Tourist attraction sites also are advertised via different marketing media such as hoardings and local transit vehicles, in counties of potential tourists.
4. It should be made obligatory for all Pakistani missions abroad to promote Pakistan in every way and manner. Providing printed material of different tourist attraction sites, arrange seminars and exhibitions to disseminate information about our country’s culture, heritage and the places to visit in Pakistan.
5. Ministry of Tourism to arrange – International Tour Operators Exhibition, where Tour Operators around the globe to be invited to participate to see Pakistan as a world tourist destination, this should be an annual feature for years to come. Ministry should also occasionally arrange to get some global giants amongst the Tour Operators for familiarization trips of Pakistan. Such proactive events can stimulate a bright future for the country.

Pakistan always has been under the grip of an international conspiracy, some of the countries are extending its maximum resources to undermine its efforts of progressions, Pakistan has to do a lot, first and foremost, and its prime responsibility will be to maintain the law and order situation, especially for the travelers coming into Pakistan, for their safety and security. Some of the Asia Pacific countries are also having Tourist Law Enforcement Agency for providing a safe and secure environment.

Hence, for the larger interest of the sustainable Tourism Development of Pakistan, we should also follow these footsteps.

We all know the wealth hidden behind this important area of development, unfortunately, we always come up with great plans for developing the tourism sector, but they never get accomplished as our priorities keep on changing. It is about time, at this game-changing scenario where the entire world is suffering due to COVID -19 pandemic, and knowing that new markets will be emerging soon; we should take bold steps with conviction and harvest the benefit.