Written By: Saalima Barakat & Srijita Das
What do we exactly mean by tourism?
The term ‘tourism’ encompasses the activities and operations of commercial organisations to accommodate travellers to traverse to places of their interest for personal, educational, professional or business motives. “Tourism is a social, cultural, and economic phenomenon that involves the migration of individuals to nations or locations beyond their typical surroundings for personal or business/professional objectives,” according to the United Nations World Tourism Organization (UNWTO). [1]
An overview of the journey of the tourism business in Bangladesh so far:
Bangladesh’s tourism sector is developing; seeing both noticeable development and turbulence. Moreover, the nation is home to several well-known tourist destinations, such as St. Martin’s Island, Cox’s Bazar, Ahsan Manzil, Jaflong, Sri Mongal, Bandarban, Sundarban, the port region, and more.
In 1972, Bangladesh Parjatan Corporation(BPC), which falls under the Ministry of Civil Aviation and Tourism, was formed. Its primary aim is to augment Bangladesh’s tourism sector and serve local and international tourists. Adding to this, in 2010, Bangladesh Tourism Board was set up to fulfil the strong demand for the private sector and tourism professionals. It is also in affiliation with the UNWTO. In 2013, the World Travel and Tourism Council(WTTC) reported that the travel and tourism industry in Bangladesh contributed to 1.8 per cent of the country’s total employment in 2012 which ranked Bangladesh 157 out of 178 countries globally.[2]
In 2012, Bangladesh was ranked 142 out of 176 countries for travel and tourism’s direct contribution to GDP, as a percentage of GDP.[2] According to the data from World Bank, in 2020, receipts in international tourism totalled $217,899,994 from $391,000,000 in 2019.[3] It is a significant 44.27% decrease from 2019. This shows a downward trend due to the Covid-19 pandemic. In fact, in 2021, the industry lost $2bn revealed by data from ADB.[5] According to various sources, the tourism industry incurred a loss of Tk.20,000 crore.[6] Adding to this, the government recently heralded an incentive package of Tk1,000 crore for the tourism sector which is included in the proposal for the fiscal year, (2022-2023). Along with this, the budget allocation for the Civil Aviation & Tourism Ministry for the fiscal year(2022-2023) is Tk.7,004 crore. The revised budget for the fiscal year(2021-2022) was Tk.4,032 crore.[7] This measures up to a 73.71% rise in the budget allocation.
Socio-economic effect of inflation in the tourism sector:
The tourism economy of Bangladesh is on the trend of facing a crisis soon, as the inflation rate is going higher every month. Moreover, prices of day-to-day goods and living are increasing rapidly but the income of people is not growing parallelly. This is why people have to spend a significant part of their savings on daily living expenses, which they might have planned to spend on vacation and tour purposes. Current VAT (Value Added Tax) and other high tax rates have been identified as major barriers to the development of Bangladesh’s tourism and hospitality sector.
In Bangladesh, taxes are imposed at different levels, including those on service industries including hotels, motels, dining establishments, and theme parks. According to the organization, taxes are frequently collected from both service suppliers and recipients of the same service, resulting in double taxation. According to what was stated, Bangladesh Parjatan Corporation must pay 15% VAT, 5% supply tax on products acquired, and 5% on income received [4]. A total of 25% in taxes must be paid, which is more than other nations like Malaysia, India (12.5%), Nepal, and Malaysia.
Underlying strengths and challenges in tourism and hospitality management of Bangladesh:
We can use a SWOT analysis to assimilate the possible strengths,weakness. opportunities and threats that this industry holds in Bangladesh.
| Strengths | Weakness | Opportunities | Threats |
| Immense amount of natural, archaeological, cultural, historical and various other man-made structures. | Inadequate budget and poor utilisation of budget by the government. E.g. for conservation of natural and cultural heritages, innovation etcetera. | Introduction of new and unique tourism such as sustainable tourism, floating restaurants etcetera. | Failure to ensure a consistently clean and hygienic environment, especially in tourist places. |
| Natural hospitality of people. | Poor research on tourism and tourism policy making. | Availability of feasible promotion through social media. | Poor management of security, thereby repelling the tourists. |
| Uniquely notable tourist spots. E.g. The world’s largest mangrove forest, longest sea beach etcetera. | Poor security for foreign tourists as well as the presence of communication barriers. | Increase in GDP, employment and foreign currency earnings. | Natural disasters and both current and future crises. |
| Distinctive biogeophysical diversity along with the seasonal rhythm. | Too much price charged on foreign tourists. | More beautification of the existing tourist spots. | Failure of optimum return from huge budget allocation. |
Recommended solutions:
- Ensuring ample safety and security for foreign tourists- The government needs to ensure beforehand the foreign tourists’ reliability in the security of touring in Bangladesh. For this, the Public Security Division must reinforce the seamless application of security policies, rules and laws. If needed, it should formulate the laws again and reinforce them in a way that is going to guarantee robust accountability among people and bring a sense of reliable security. However, existential corruption could be a major hindrance.
- Properly allocating and utilising the budget – The budget allocation needs to increase significantly and has to be properly revised annually with strong monitoring of the budget to be spent. To improve growth, SMART objectives should be established. To get the best results, solid tourist policies must also be implemented.
- Conducting stronger research on the development of tourism – Researching on better marketing policies, how to match with international tourism standards, better promotional activities and innovation policies could aid in the more effective development of the tourism industry. Also, courses or degrees in tourism can be included in more universities to boost up better quality research. As it can be quite costly, the government can utilize the budget allocation on better quality research on tourism.
- Involving the private sector- To improve efficiency and marketing in the tourist business, the private sector must get more involved. However, it must be assured that international visitors are not exploited for profit by businesses.
- Reducing tax If more foreign tourists are to be attracted, the price charged on certain commodities and services, e.g.museum tickets, park visits etc. all related to tourism needs to be reduced to make them cheaper. For this, the tax levied needs to be reduced. The government can alternatively obtain tax revenue from non-merit goods & services or other sources that will not make consumers suffer.
Conclusion:
Tourism is one of the world’s largest industries with a lucrative base.Bangladesh undoubtedly has untapped potential in tourism that can lead to remarkable economic growth and development. For this, the riverine nation has to leverage its strengths and opportunities to gain the best outcome. Therefore, it is high time that Bangladesh starts reconsidering its time and efforts poured into this industry to become one of the world’s topmost tourist destinations.
Featured Image Courtesy: TBS News
References:
[1] UNWTO, 2008)Glossary of tourism terms | UNWTO” https://www.unwto.org/glossary-tourism-terms
[2(WTTC,2013)https://web.archive.org/web/20131007183403/http://www.wttc.org/site_media/uploads/downloads/bangladesh2013.pdf
[3](World Bank,2020)https://data.worldbank.org/indicator/ST.INT.RCPT.CD?locations=BD
[5](DhakaTribune,2022)https://www.dhakatribune.com/business/2022/01/18/bangladesh-tourism-industry-lost-2b-in-2021
[6](The Daily Star, 2021) https://www.thedailystar.net/backpage/news/aviation-tourism-sector-budget-blanks-out-recovery-plan-2105001
Saalima Barakat is an associate for the Business Network Policy Team of Youth Policy Forum (YPF) & recently finished her A levels from Cardiff International School Dhaka (CISD)
Srijita Das is an associate for the Business Network Policy Team of Youth Policy Forum (YPF) & currently pursuing ACCA (Global Chartered Accounting)