A macro-economic impact assessment
Yanpvuo Kikon
India earned $27 Billion (Rs 1,75,000 crore) from more than 1 Crore foreign tourists who visited the country in 2017. Out of 1 Crore foreign tourists to India, 2401 visited Nagaland hornbill festival.
According to the survey of 30 States and UT’s done in association with the World Travel & Tourism Council-India Initiative (WTTC-II) in 2017, among the North East States, Sikkim was ranked 22nd position in the list followed by Mizoram (Rank 23), Tripura (Rank 24), Assam (Rank 26), Nagaland (Rank 27), Manipur (Rank 28), Arunachal Pradesh (Rank 29) and Meghalaya (Rank 30).
Part 1 – HOW MUCH IS THE GOVERNMENT ROI (RETURN ON INVESTMENT) FOR OUR LOCAL TOURISM INDUSTRY? More than Rs.10,000 – The average amount which a tourist from out of state will spend during hornbill festival when they visit Nagaland as indicated by a collective online assessment (The Naga Blog & Naga Discussion Group) This includes expenditure on local taxi, accommodation, local food, buying local handloom & handicrafts etc (Whereas as per National Council of Applied Economic Research, the average per-tourist per day inbound tourism expenditure by international tourists in 2010 for Nagaland is Rs.7550/- However, we shall consider the amount endorsed by the online survey for this article.)
A total of 2,43,214 - 2,401 foreign tourists, 38,700 domestic tourists and 2,02,113 local visitors visited Hornbill festival in 2017, an increase of around 115% from 2016. 38,700 + 2401 = 41,101 tourists 41,101 tourists x Rs.10,000 = Rs. 41,10,10,000 ~ Around Rs. 41 Crore money from outside enters our local economy.
In addition to local tourists 2,02,113 local visitors visited hornbill festival, if each local visitor also spend at least Rs.500, then 2,02,113 x Rs.500 = Rs.10,10,56,500 which means around Rs. 10 Crore gets circulated in our local economy.
IN 10 DAYS OF HORNBILL, A MINIMUM OF RS.51 CRORE IS INJECTED INTO OUR LOCAL ECONOMY Let us assume that the Government of Nagaland allocates around Rs.5 Crore to Tourism department to organize hornbill festival to promote our tourism industry.
Investment (Seed money) – Rs.5 Crore
Return on Investment for the local tourism industry – Rs. 51 Crore If we compare this outcome to the Biblical analogy as illustrated in Matthew 25:14-30, we learn that the master rewarded the servants who multiplied the seed money(Talent). A Talent was an ancient unit of measurement for weighing Gold and Silver. In today’s currency rates, 1 Talent would be equivalent to around Rs.8 Crores.
Part 2 – WHO ARE THE BENEFICIARIES OF HORNBILL FESTIVAL?
“Tourists come to spend money in exchange of a good memorable experience.”
COMPARED TO ALL OTHER TRADE & COMMERCE ACTIVITY IN THE STATE WHERE ECONOMIC BENEFICIARY IS THE NON-LOCAL, HORNBILL FESTIVAL IS THE ONLY ECONOMIC ACTIVITY IN THE HISTORY OF OUR STATE WHERE THE MAJORITY ECONOMIC BENEFICIARY ARE LOCAL NAGAS
Beneficiaries in tourism industry are those who produce goods and provide services which attract tourists to spend their money through various entrepreneurial activities such as:
Many Educated and unemployed youths during hornbill open food stalls during night bazaar and earn upto Rs.1-2 lakhs in 10 days.
• Entrepreneurs including those villagers around Kisama such as Jakhama, Kigwema are now earning money by converting their houses into clean homestay accommodation and earn upto Rs. 50,000 in 10 days during the festival.
• Hornbill is the only time where I have personally also witnessed that that the ladies from underprivileged section of our society who run the soft toy unit Ladybug earn upto Rs.1 lakh by selling soft toys made in Nagaland to tourists and local visitors.
• Local taxis are fully engaged and record their highest incomes of the year
• Local musicians and entertainers also get booked for numerous shows besides the wedding season where some musicians earn upto Rs.1.5 lakh during this season
• Local handicraft, handloom and textiles by individuals and self-help groups witness the highest sale during hornbill
• Local food industry which includes our local food stalls and also local food products gets a massive boost during hornbill wherein our tourists and locals together consume large amounts of local food products
• Local writers, artists sell their creative products and many of them including the likes of Tase, Penjim Konyak etc get due recognition and increase in demand of their works
• There are several other beneficiaries including local masonries (Stone mistry), carpenters, bamboo craftsmen and those behind the scene who earn for their skill and services.
Those locals who don’t like to work and earn during hornbill but like to roam around like tourists and spend their money also contribute to our tourism industry.
As a tribal society, our lives mostly revolve around social activities and not economic activities of trade or commerce. Hornbill is an example which can be replicated by all indigenous peoples all around the world. The social activity of this fiesta triggers our entrepreneurial spirits, motivates productivity and thereby yeilds economic benefits (This phenomenon is also observed in various church related fund raising activities.) Hornbill is the only time when the state instead of depending on the Central Government for our livelihood actually attract and generate a lot of money from outside the state into our local economy.
SHOULD WE REDUCE THE NUMBER OF DAYS?
It is wiser to take “informed” decisions based on facts, logic & data rather than taking decisions based on assumptions, imagination, emotions and feelings.
Logic - If a tourism industry based entrepreneur earns Rs.10,000 in 10 days, reducing to 5 days means will reduce his earning from Rs.10,000 to Rs.5000 (Reduction by 100%) Apply this logic to all other tourism based entrepreneurs - The taxis, food stalls, handloom & handicrafts, food product manufacturers, artists, entertainers etc and we realise that the Rs.51 Crore of money from outside which comes into our State will be reduced to around Rs.24 Crores if, (say) the festival is reduced from 10 to 5 days.
If there is any other reason to support reduction of number of days, then the same argument should be put forward with supporting logic, facts and data along with an economic impact assessment on our local economy.
THEN SHOULD IT BE EXPANDED TO OTHER DISTRICTS?
Hornbill should definitely be replicated in other districts if we wish to build a tribal tourist circuit. The idea to shift music festival to Dimapur is a welcome step because now even the local entrepreneurs in Dimapur should be able to capitalize on this festival.
Several tourists remarked how they wish to visit again but only because of two major reasons they will not visit again until these two factors are taken care of:
1. One of the worst roads in the world 2. Exorbitant price of products We need to expedite the completion of our four lane and also ensure all roads in Nagaland are dust-free and of durable quality such as the German-technology road built in Dimapur leading to Dhobinullah-Signal Basti-Thahekhu. Even improving the look (Façade) of our cities by planting more greenery, trees, flowers along our highway & colony roads should be encouraged.
Tourists would not want to visit other districts on such horrible roads. Tour operators, hosts and event organizers in our rural areas also need to be provided basic training in hospitality, cleanliness, hygiene and tourism related services if we aim to expand hornbill to rural areas.
There has been several complaints of the food being sold in Kisama as over-priced. However, we must understand that Governments cannot enforce pricing regulation but can only levy taxes on goods and services being sold by entrepreneurs. It is up to the business owner to fix the price of his product or service and it is up to the customer to decide whether the price of a certain product or service is worth paying for. Food stalls in Kisama should note that their over-priced products will leave a bad impression on the value for money factor on visitors and should reconsider the pricing of their goods and services during Hornbill.
HOW TO IMPROVE HORNBILL? 1. RESTRUCTURE THE ENTIRE FESTIVAL: The Government can try to take next level by reducing burden and expenditure on departments with more collaborations and outsourcing, improving sponsorship and Government revenue, allowing innovation and introduce creative elements with high-value experiences and make it more people and tourist-centric, especially during the inauguration function by minimizing on the third world VIP culture. Real hornbills can also replace the wooden hornbills perched on the trees around the heritage village.
2. SET EXPECTATIONS, TARGETS, FOCUS AREAS AND OUTSOURCE THE ENTIRE EVENT MANAGEMENT: For one year, Government can test a strategic outsourcing model with top tourism companies by setting target KPI (Key Performance Indicators) and SLA’s (Service Level Agreements) such as return on investment, global reach, attendance, tourist feedback, local economic impact assessment etc without having the need to give away a title sponsorship.
Our local event managers can take care of the cultural and entertainment aspects while the tourism company can focus to improve the revenue model, the festival façade, branding, experience etc This year is declared by Ministry of tourism as the year of adventure. The Government can also include this theme to be delivered in the plan of action by the event implementing agency.
3. IMPROVE GOVERNMENT REVENUE & TAX ADVISORY: Governments across the world earn revenue through levies and taxes or a few successful Public Sector Undertakings. The Nagaland Government will earn during Hornbill mostly through indirect taxes such as GST where tourists spend on accommodation, food, taxi, products etc so long as these businesses include GST in their invoices and collect commercial taxes on behalf of the Govt and deposit these taxes to the Government treasury. However, most of our local products and services are usually sold without including GST. Our Government will need to work with commercial taxes department and also consult with tax advisory consultants to devise strategic taxation models for enabling a financially inclusive economy wherein Government treasury also becomes a beneficiary of the tourism industry without increasing the burden on local business and tourists/visitors.
Innovation and bringing in new elements each year by making it more interesting and engaging for the tourist will make Hornbill an attractive destination for tourists globally without losing out to competition from Arunachal, Manipur and other neighbouring states which are aggressively progressing ahead.
