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The Intertwining Of Smart Cities And Sustainable Tourism – The Opportunity Of Investing In Tomorrow

Transforming cities to make them smarter and more sustainable, is indeed a monumental task, but investments in the domain can help provide just the right financial and technical edge to help these potential tourism hubs to take advantage of their unique assets and turn into the most profitable ventures of the future.

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As globalization unifies the world, smart cities are actively spearheading growth for countless domains, an intrinsic part of which is the travel and tourism industry. As a result of the same, for leaders spearheading this new era of innovation, there is one common aim. Creating a self-sustainable environment to facilitate the needs of tomorrow, and steering strategies to integrate next generation technology with the lives of millions to realise the ‘smart city’ vision. 

As this trend takes over, the greatest forces in the industry have been unified and have recognised the immense potential smart cities hold, tapping into the many benefits of technological advancements in the field, that are centred around travel and tourism. As one of the most agile sectors in today’s world, it is constantly shaping this phenomenon, and reinventing itself to make way for the future. 

Smart cities are essentially a framework that make use of information and communication technologies to promote sustainable development, an intrinsic part of which is tourism. A technologically modern area, they are built to integrate technology for a better quality of life. For the entire travel domain, smart cities present a brilliant opportunity to invest in the future innovations of the industry, as they continue to enhance tourism experiences across the world. They not only improve lives in the process, but also equip the sector to generate large scale opportunities, ranging from employment to millions, to planting the seeds of mutually beneficial economic & cultural exchanges to reducing carbon footprints. According to Global News Wire, the global smart city market is slated to grow at a rate of 14.8% CAGR from approximately 410.8 billion U.S. dollars in 2020, to 820.7 billion U.S. dollars in 2025, indicative of its role in shaping future of tourism. Attracting investors across all spectrums, smart cities also hold the appeal of providing the provision of a safer environment and upgraded facilities. 

The vertical playing an active role in this monumental shift across the travel domain for smart cities is the concept of ‘smart tourism’. For an industry like travel & tourism, which is one of the major components of economic growth for communities worldwide, this new concept is centred around building innovative tools to increase efficiency and creating trade corridors to attract long term investments on the back of collaboration, leadership, and information & communication technology tools. Continually enhancing tourism experiences, and improving the efficiency of resource management, it can be a great asset in attracting global investments that also focus on the asset class, such as CMNG Capital and Eurazeo. This step can be especially beneficial in the post-pandemic world, as the sector looks to revive itself while expanding its digital footprint. 

Through its unique and far-reaching features, smart tourism is continually helping institutions to connect to not just citizens but also a much wider population, making it a priority for stakeholders who are driving this innovation, and transforming the smart city landscape to enable tourism and promote trade. It holds an immense potential, rapidly developing India as a viable tourism destination, facilitating its rise as an economic power of the future.

In India, the government has actively recognised 100 cities for the smart mission. About 2,05,018 crores have been invested for the same, according to official data on the smart cities India website. Furthermore, 3,055 projects have already been completed out of the 5151 projects proposed. Several international entities have also contributed to helping India realise this vision, including the U.K government, AFD, World Resources Institute and the Rockefeller Foundation.  

A city is known to be smart because of its innovative undertakings, and for any trade centric environment, the key is to generate business, through the power of tourism, which can be rapidly assisted through investments in the sector. This includes strides in e-governance, adequate water supply, sanitation and waste management, efficient public utility, and financial management. Systematic investments in the domain can help birth a well-rounded structure, for a future tourism powerhouse yielding great financial returns. Keeping the same in mind, in order to provide a smooth transition for public-private partnerships and help smart cities grow faster, India is relaxing access to its urban infrastructure and services sector for private investment and aiming at PPP ventures. Private corporations such as IL&FS Energy Development Company, CISCO, Hitachi, Siemens, and NEC Corporation among others have actively committed to the same, creating more space for development through the special program.

India’s centrally sponsored scheme (CSS) previously extended financial support to the mission through the provision of Rs. 48,000 crores over five years, with an average Rs. 100 crore per city per year from 2015-20. It is a move that has helped in the strategic expansion of smart cities in India and has also facilitated the growth of development and reforms to promote local tourism. Several of the projects taken up nationally, across various smart cities in the country include the building of smart toilets, smart libraries, smart water supplies, green buildings, and model road projects amongst other facilities, that create a direct impact on the quality of tourism in the country. 

Transforming existing cities into smart cities is a footstep by step process, through the integration of new processes into older systems, acting as the pathway to create self-sustaining tourism hotspots of the future. Strengthening operations on both international markets and domestic tourism infrastructure, play a key role in the same, and are intrinsic to strengthening the tourism sector as they help in integrating smart cities with the goal of urbanization to curate smart tourism destinations, on the back of advanced hospitality tools.

According to Invest India, before the pandemic hit the country, a total of 2.93 million foreign tourists arrived on e-Tourist Visa, in 2019, registering a growth of 23.6%. This clearly indicates that the technological edge of smart cities is bound to provide just the needed push for tourism in the country to thrive. They also create an economic infrastructure that can facilitate a futuristic roadmap for modern age tourism and promote urbanization, which has long since been the driving factor producing economical returns across industries. 

However, India has a long way to go, in terms of organizing its tourism infrastructure, and providing the way forward for the industry. According to CARE Ratings, at the end of FY18, the total number of ‘keys’ (rooms) in the top 11 key Indian cities was estimated at 92,537. About 53% of the room inventory was concentrated in Mumbai, NCR, and Bengaluru. In contrast, there are approximately 9 million guest rooms in the US including everything from budget motels to 5-star hotels, according to Condor Ferries. This is a gap that has actively widened and can be bridged by investing in smart cities and uniting towards the common goal of urbanization. It is an effort that will not help develop a profitable electronic landscape, but also enhance other swiftly developing areas of tourism that already exist. These include sub segments such as recreational, health, adventure, health, and cultural tourism amongst others. 

Transforming cities to make them smarter and more sustainable, is indeed a monumental task, but investments in the domain can help provide just the right financial and technical edge to help these potential tourism hubs to take advantage of their unique assets and turn into the most profitable ventures of the future. Not only do smart cities create an extensive trade network with the promise of yielding capital, but they can also help in implementing far-reaching measures, to ensure future generations can continue to enjoy the city with the promise of great economic rewards for investors.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Rajiv Singh .

The author is Vice President TFCI

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