26.

Tourism Development
26.1. Introduction

Pakistan, with the worlds oldest civilization, exotic mountain beauty and splendid seasonal variety, has immense tourist potential. The sacred religious places, which spread throughout the country, make Pakistan an attractive place for a variety of people and religions. The tourism assets of Pakistan include a coastal zone spreading over one thousand kilometers along the Arabian Sea offering long term development potential for beach resorts, diversified natural deserts in the south and beautiful hill stations and valleys in the north. It has also great potential for tourism sports like mountaineering and trekking. The relics of the Indus Civilization in the south, Gandhara Civilization in the north and the great heritage of Mughals in Punjab are exceptional cultural assets of Pakistan. There are also great adventure zones with the high mountains located in the north of the country, where four of the worlds largest ranges meet. The tourism sector investments in the country are dominated by private sector with the role of public sector mainly as a facilitator. Almost the entire hotel, restaurant, travel agency and tour operator business is in the private sector. The Pakistan Tourism Development Corporation (PTDC) is also operating a limited number of hotels and roadside facilities in areas where the private sector has been reluctant. The Department of Tourist Services (DTS) is responsible for maintaining the standard and categorization of hotel industry. The Ministry of Tourism looks after the entire public sector interventions including formulation of policies and overseeing the legal and regulatory framework. The Tourism Master Plan study of 2000 notes that (i) tourism in Pakistan is still in the early stages of development; (ii) the foreign tourists represent only about 13 per cent of all visitor arrivals; (iii) true domestic tourists represent only about 5-7 per cent of all domestic travelers; (iv) mountain tourism (mountaineering) will not expand much beyond the level attained in 2000, although it may remain depressed for the following few years; and (v) trekking in all areas may grow although the next few years may show a temporary decline. The vision of the sector is to exploit the great potential of cultural and religious tourism of the country to its optimum level for employment generation, foreign exchange earning, poverty reduction and image enhancement of the country. Pakistan presently ranks very low in terms of world tourism income. Out of global tourism income of $ 514 billion, the share of South Asia is $ 5.4 billion including Pakistans share of only $ 135 million i.e. 0.03 per cent of global and 2.5 per cent of South Asian share. Out of the total tourists arrivals in the world estimated at 694 million per year, Pakistan receives only 0.5 million tourists annually, a very low figure. Even among South Asian countries, the tourist arrival in Pakistan is very low. 26.2. Issues

Pakistan has been facing problems on policy as well as implementation level to exploit the inherent tourist potential of the country due to social and religious constraints, ineffective promotional policies, lack of infrastructure and inadequate tourist services. Tourism potential of the country has not been realized and harnessed properly during the

past because of (i) lack of initiatives on part of the concerned Government Departments, which also include inadequate knowledge and training of relevant personnel in tourism sector; (ii) law and order situation in the country particularly in the areas of high tourist attraction; (iii) general image of the country particularly in Europe and USA, which to a large extent is based on fears generated out of media messages; (iv) undeveloped tourist sites and inadequate infrastructure facilities; (v) absence of entertainment contents associated with tourism, which are considered necessary worldwide; (vi) socio-cultural constraints; (vii) lack of incentives in the tourism sector; and (viii) lack of projection through media to the outside world. Promotion of tourism has been predominantly a public sector sponsored activity. The hotel and transport business is in the hands of the private sector, which has not contributed much to meeting the development costs. The Tourism Development Corporations created at the federal and provincial levels have not proved very helpful in the promotion of tourism. The public sector initiatives in the form of creation of motels and roadside facilities have not been economically viable. Other issues constraining the development of tourism in Pakistan include (i) inadequate funding and international promotion, and legal framework; (ii) high taxes on hotels and tourist resorts; (iii) lack of coordination and mistrust between concerned government agencies and the private sector; and (iv) inconsistency in determining hotel standards and categorization, particularly of small hotels. 26.3. Objectives

The sector objectives include: (a) to enhance tourism activities, increase tourist arrivals, and make tourism an instrument for generating employment, alleviating poverty, and increasing foreign exchange earnings; (b) to promote affordable, accessible and enjoyable domestic tourism and cultural and sports festivals; tourism of the religious sites and old civilizations; and foreign tourism linked to regional tourism particularly among SAARC and ECO countries and (c) to enhance coordination between public and private sectors and upgrade resources to ensure desired standards of quality service. 26.4. Policy and Strategy

Policy support would be provided in implementing the key proposals of the master plan in five broad areas covering (i) legislation, management, organization and facilitation; (ii) investment, funding, infrastructure, transport tax, and concessions; (iii) marketing, promotion and product development; (iv) environment, conservation and planning; and (v) human resource development and community development. Policy measures for tourism development would include: (i) a paradigm shift from promoting seasonal tourism to year round tourism; (ii) an emphasis on qualitative improvement of tourist services and the tourist product; (iii) a review of legislation impacting on tourism to promote the tourist industry; (iv) measures to stimulate private sector involvement in tourism through provision of appropriate incentives; and (v) an emphasis on better marketing of the tourist product. The strategy would be to develop appropriate incentives to promote greater private sector investment in creation of tourist facilities. Public sector investment in the development of infrastructure facilities will be made part of overall national development effort. While the ongoing projects will be completed as part of federal PSDP, the development requirements for new projects will be met from privatization of existing motels

and from credit budget. Greater financial autonomy will be given to the public sector tourism agencies. The strategies to develop tourism industry would include: i) ii) Formulation of a comprehensive and realistic tourism policy that will support tourism as an industry and create credibility. The private sector will be involved for tourism development through lease/rent agreements. PTDC will concentrate its activities in the marketing, promotion, and development of tourism. New market segments will be explored. Marketing efforts for tourism at cultural places will be intensified. Training in tourism services will be improved in collaboration with international tourism and hotel management institutes. The involvement of Pakistan embassies/ missions abroad for tourism promotion will be enhanced. The tourism related legislation would be revised, including consolidation of various rules and regulations, revision of Hotel and Restaurant Act 1976 and Travel Agency Act of 1976 and the adoption of a pro-investment land lease policy. An emphasis will be placed on provision of physical infrastructure at places of touristic interest complemented by environmental improvement programmes.

iii) iv) v) vi) vii)

(viii)

26.5.

Programme

The tourism sector will assume a greater role in stimulating the growth of the economy during the Plan. Tourist arrivals are estimated to grow at an average rate of 10 percent per annum to reach 0.85 million by 2009-10. Tourism receipts are targeted to grow at an average rate of 20 per cent to reach $ 500 million in 2009-10. Details are in Annnex I. Continuous improvements will be made in tourism products and services, marketing and promotion, infrastructure and institutional, and regulatory framework to build the tourism industry. The emphasis of the programme will be on promoting domestic, religious and regional tourism with development of touristic areas including accommodation and transport facilities. For foreign tourists secluded/bonded zones will be developed, which will have boarding, lodging and entertainment facilities. Domestic Tourism The specific locations/ sites frequented by local tourists will be developed by providing them inexpensive and clean accommodation, food, entertainment activities and transport. The sites to be developed to promote domestic tourism would include the following: i) ii) iii) iv) Murree/Guliat/Nathiagali/Ayubia Kaghan Valley (Shogran, Naran, Saiful Maluk, Babusar) Quetta Valley (Hanna Lake, Ziarat) City Tours Lahore/Karachi/Islamabad/ Peshawar.

v) vi) vii) viii) ix)

Swat Valley (Kalam, Marghazar, Bahrain, Madian, Chitral, Kafiristan). Karachi Beaches and Lakes (Sonmiani, Gaddani, Hawksbay, Sandspit) Northern Areas (Gilgit, Skardu, Hunza, Satpara, Shangrila). Sindh (Haleji Lake, Gorakh Hills, Ranikot Fort) Soft Adventure Tourism for Youth

The other activities to be promoted would include: i) ii) iii) iv) v) vi) Arranging Tourist Safaris such as Mountain and Desert Safaris. More youth hostels to be established by Youth Hostel Association. Basic activities camps to be established on nodal locations for youth groups at economical rates. Festivals to be introduced on a regular basis to encourage gatherings for short periods. National Parks to encourage tours with requisite facilities provided at the fringes of the parks, and Awareness campaign to be launched with the media along with well designed publications and pamphlets.

Religious Tourism Keeping in view the high potential of religious tourism, several areas/clusters will be developed including basic infrastructure, accommodation facilities, food stalls, entertainment and shopping for the pilgrims. The areas proposed to be developed include (i) for Sikhs, Nankana Sahib and Panja Sahib (Hassanabadal), ii) for Hindus, Katas Temples (Jehlum), iii) for Buddhists, Taxila, Takhtbhai and Swat (Stupas); and iv) for Muslims, Thatta Necropolis, Lahore, Multan and Sehwan Sharif. Foreign Tourism The foreign tourism promotion will be enhanced by forging strategic alliances, enlarging international cooperation and promoting regional tourism activities, particularly in SAARC. In view of the security concerns and socio economic restraints in the country, it is proposed that only designated/bonded areas Holiday Villages will be developed exclusively for foreign tourists in collaboration with the private sector. These clusters will have entertainment facilities, tourists activities such as skiing, hiking, surfing, camping and cruising. The holiday villages will initially be constructed in Northern Areas like Gilgit, Hunza and Chitral, and beaches of Gwadar (Korekalmat Beach), Pasni and Jiwani. Infrastructure Development and Environmental Improvement Integrated improvement of physical infrastructure will be undertaken in areas of touristic interest through coordination of federal, provincial and local programmes covering provision of roads, water supply, sanitation (including public toilets), drainage, solid waste management, and other municipal facilities. The environment of touristic areas will be improved through controlling pollution and taking up river cleaning projects such as Swat River Pollution Control.

Public Facility Areas A network of public facility areas will be created throughout the country at tourist attraction places like cultural and historical sites, commercial centers, bus stops, road/highways, railway stations, beaches, and hill resorts. Based on local plans, suitable locations will be identified for construction of these facilities. Antiquity Act The Antiquity Act 1975, which provides protection and legal cover to archaeological and historical sites is not being implemented properly. While the law stipulates that no tresspassing can be done within 200 meters around a monument, in practice there is tresspassing in the surroundings of most of the monuments. This has resulted in pilferage and theft of precious artifacts and relics to other countries. Due to tresspassing the monuments cannot be developed for attracting tourists. A strict enforcement of the law is envisaged in MTDF to develop these culturally rich sites for tourists. Institutional and Human Resource Development The Ministry of Tourism, Pakistan Tourism Development Corporation and Department of Tourist Services will be reorganized and strengthened to play to more dynamic role in tourism development in line with the strategy envisaged in MTDF. The hotel management and training institutes in the country are not delivering the desired results due to lack of regulation, management and teaching staff. Similarly, the host of private sector institutions providing ticketing and travel courses are not regulated which results in variable standards in the sector. These institutions would be strengthened for efficient regulation and for producing the required skilled manpower. As against the annual training needs of the tourism industry of about 3000 skilled staff, the total output of the existing training institutes is only about 500. This imbalance is planned to be corrected through concerted private sector training initiatives. Training standards would be made mandatory for all categories and the training institutions upgraded to meet these standards. This would cover training of faculty members, development of curricula, syllabi and resource material, provision of necessary equipment and training aids and upgrading of libraries. Research Studies A comprehensive research programme will be implemented to generate data on the inflow of tourists, expenditures, sites visited and duration of stay. Studies will also be conducted to estimate private sector investment in the tourism sector. The results will be used to review measures for enhancing private sector investment, including review of policies and incentive packages. Provincial Programmes The Provincial Tourism Development Corporations and agencies will facilitate development of resorts, promotion of hotel chains, and entertainment industry, development of theme parks, improvement of historic inter-city areas and urban transport, development and rehabilitation of urban and rural road networks, development of urban commercial centers, promotion of tourism activities, development of holiday villages and establishment of museums, motels and cultural complexes.

Private Sector Private sector will play a key role in the development of the tourist industry including hotel accommodation, resorts, recreation activities, transport and tour operations. Measures will also be taken to increase coordination and communication between private and public sectors and to develop public private partnerships. The modus operandi could include land leasing for long tenures, BOT and equity investments. The major private sector investment will be in the hotel industry which is expected to grow at a rapid pace. The number of hotels in all categories will increase from 1469 to 1711 by the end of the MTDF period, with a corresponding increase in the number of rooms from 36451 to 39114 rooms by 2010. Categorization of all hotels will be completed during the MTDF period. Measures will be taken to facilitate travel and transport sector investment. Private sector will also be given incentives to invest in parks, clubs, resorts and development of cultural and historical sites. Other areas of major investments will be restaurants, public facilities and shopping malls. 26.6. Sector Investment

Investments by the private sector for tourism development during MTDF period are estimated in the range of Rs. 30-40 billion. The public sector investment will be limited to development of infrastructure and other necessary support to private sector. The investment through the federal PSDP is estimated at Rs 1.37 billion. Details are in Annex II. During the first year (2005-06) of the MTDF Rs. 40 million have been allocated to ongoing and new projects which include motels at Bunni, Chamman, Hawks Bay, Baran Kalay, Astak, updation of research Studies, networking, development of website and motel at Gorag Hills. With the adoption of a holistic and integrated approach for tourism development, an emphasis on product development and promotion linked with human resource development and through strategic alliances, there is considerable potential for tourism industry to grow during the MTDF period.

Annex I Physical Targets for 2005-10 S. No 1. 2. 3. 4 5. Item Arrivals Unit 000 2004-05 500 40 135 1469 36451 2005-06 605 41 178 1515 36969 2006-07 665 43 234 1562 37494 2007-08 730 44 309 1610 38026 2008-09 800 45 407 1660 38566 2009-10 850 46 537 1711 39114

Domestic travel 000 Income Hotels Rooms $ Mn No. No.

Annex II Tourism Investment Under Federal PSDP (2005-10) (Rs Million) Projects Research Studies On-going projects of PTDC Motels at Astak, Baran Kalay, Bunni, Hawks Bay and Chaman PTDC Head Office, Islamabad Motels at Thandiani/ Naltar TFCs on Highways Holiday Village Islamabad Camping Grounds at various Locations Upgradation of ITHM Lahore and Rawalpindi Facilities at Nankana Sahib TFC at Gorakh Hill Motels on coastal highway at Ormara and Pasni Tourist Resorts at Harboi and Zarghun Beach Resort at Gwadar Chairlift at Ziarat Restoration of Sheikh Badin Resort TFCs at various Locations Remodel Ski Resort Ayubia Ski resort at Shogran Cultural heritage Promotion TFCs at four locations in Northern Areas Museums at Gilgit and Skardu Holiday Village at Banjoosa Camping grounds in AJK Total 2005-10 50 20 38 36 116 100 45 10 30 30 60 120 150 70 44 96 15 70 53 8 24 150 30 1367