Tamil Nadu is drawing tourists in droves, and welcoming private players to scale up the sector. The state is now experimenting with the public-private partnership (PPP) model in tourism big time. In line with this, the state govt recently signed 127 MoUs worth more than `22,700 crore with private players. The investments are spread across amusement parks, adventure tourism, sports and recreation, ropeway circuits, luxury hotels and resorts. The potential has piqued global interest with Vietnam-based conglomerate Vingroup, which manufactures VinFast EVs at Tuticorin, exploring multiple locations in TN to set up amusement parks and resorts.The development comes amid industries and the finance dept coordinating with the tourism dept to promote the sector. While SIPCOT, under the industries department, is identifying locations to be developed into well-equipped tourist destinations that can be allotted to investors in hospitality, the Tamil Nadu Infrastructure Development Board (TNIDB), part of the finance dept, is exploring projects with tourism potential.
The govt is structuring PPP projects to engage the private sector proactively and has started off with Tamil Nadu Tourism Development Corporation (TTDC), says Pooja Kulkarni, CEO, TNIDB. Glow Garden in Mamallapuram, inaugurated a week ago and a floating restaurant at Muttukadu on ECR are among the successful examples in this regard. The modeling of a PPP project involves risk-sharing between two partners in a way that balances delivery of facilities or services and risk management between the govt, authority, and PPP partner. “There are several projection mappings across India executed under the engineering, procurement, and construction (EPC) combined with operations & maintenance (O&M) model, wherein a private sector partner merely delivers some output. But, PPP models we are executing comprises an investment component from the private partner. It gives the partner a right into the project revenues. So, the partner has the opportunity to see upsides. At the same time, the govt has an upside since much of the initial risk is being taken by the govt that includes initial investments. Continued engagement drives the private sector partner,” she says. Noting that bids have been launched for four camping sites that include Yelagiri, Jawadhu, and Kolli hills, she says, “We welcome the private sector to participate and develop them.” Steps are being taken to identify five or six heritage buildings under maintenance of Public Works Department and explore the possibility of converting them into heritage hotels involving private hospitality players. “We have started identifying the structures,” she adds.According to Kulkarni, Guidance Tamil Nadu, the govt’s nodal agency for investment promotion, is getting into tourism promotion, which now has a tourism desk. “Tourism itself has been classified as an industry,” she says.The govt’s focus is private participation in our tourism initiatives and that’s the reason for signing 127 MoUs, says Commissioner of tourism, and TTDC MD Innocent Divya. “We are looking at promoting cultural and heritage circuits and adventure tourism. Tamil Nadu Maritime Board is coming up with cruise tourism initiatives. Tourists visiting heritage sites will also explore adventure tourism. The idea is to increase number of days that a tourist visits the state. For the first time, we are engaging private sector in a big way to leverage their expertise.” Pointing out that the efforts are part of Tamil Nadu Tourism Policy 2023 that offers incentives for investors in projects that are categorised as A, B and C, she said, the profit sharing ratio will be decided on these projects.South India hotels and restaurants association (SIHRA) honorary secretary T Nataraajan said, hotels are witnessing a rise in occupancy and the number of keys should be increased to cater to this demand. “The TN govt should offer land for tourism projects on a long-term lease for 99 years at concessional rates,” he adds. Tourist arrivals to TN stood at 28.7 crore during calendar year 2023, which includes both domestic and international travellers. In 2024, this increased to 30.8 crore, wherein TN ranked second, in domestic tourist arrivals.Vikram Cotah, CEO, GRT hotels & resorts observed that PPP models must be viewed from the perspective of destination-making models. “We should make destinations involving the govt, private players and the local communities. One in every 10 people globally works in tourism, hospitality or related sectors. When you put up a hotel, it creates five other ancillary streams such as arts and crafts, street food, entertainment and guides, and these offer indirect jobs. PPP in sustainable eco tourism projects can also be explored,” he says.P Asoka, president of approved tour guides association, Chennai says, Rajasthan and Goa have successfully rolled out their PPP models in hospitality and chartered flights respectively. “A foreign tourist visiting TN as part of a group stays for an average of nine days and spends $200-$250 every day that includes hotels, travel and shopping, while an overseas backpacker explores the state for one month, spending an average of $50 a day. Tourism is dominated by the private sector with nearly 90% share. Exploring PPP in a big way now will generate huge revenue and employment opportunities,” he adds.
