Idyllic Tourist Dreams Of A Camper – Diary
The planned recreational vehicle (RV) industry could propel the tourism sector to contribute up to 7% to Pakistan’s GDP – currently at 3.5% – and a subsequent increase in the amount of the annual tax collected by the Federal Board of Revenue (FBR).
Pakistan’s rich array of natural landscapes await progressive investors to delve into the multi-billion dollar RV industry. With plenty of opportunities for manufacturers of recreational vehicles – RVs, RVs, and travel trailers – Pakistan’s tourism industry is reportedly experiencing rising economic trends in addition to boosting automotive engineering in the country. The Pakistani government could take authoritative steps to persuade domestic and foreign investors both to set up local RV manufacturing units and to import these specially designed vehicles.
The overall demand for recreational vehicles is driven primarily by two factors: passion for tourism and accessibility. Let me talk about the purchasing power of native Pakistanis: According to the Pakistan Automobile Dealers Association, the country’s average monthly import of new and used vehicles is just over 2,500 units, exceeding UK average monthly motorhome sales of 1050 units by one and a half times. An average motorhome costs $ 20,000. Pakistanis bought more than 1,900 units of KIA Sportage cars in January 2021. The average price of this vehicle is almost double that of a motorhome. It reveals that a large number of Pakistanis are able to purchase an RV, opening up new avenues for RV manufacturers and importers. This buying parity, if accompanied by Pakistanis’ unconditional love for travel, camping and caravanning, could spur larger mercantile businesses.
Pakistan’s rich spectrum of natural beauty awaits progressive investors to delve into the multi-billion dollar RV industry
With four distinct climatic zones, Pakistan preserves the scenic beauty to attract domestic and foreign vacationers. From the mountains of the Himalayas to the plains of the Indus, and from the divinely blessed regions of the North to the green waters of Gwadar, the whole terrain seems to flourish with a multitude of textures. The country’s tourism industry has recently gained momentum. Hundreds of thousands of people have the net financial worth to purchase luxury travel cars, travel trailers, motor homes, and other recreational vehicles.
The insurance industry is another area that is said to thrive exponentially under the auspices of VR culture. In addition to comprehensive insurance coverage, the concepts of liability coverage, collision coverage, and vacation coverage could make it easier for both RV owners and insurers. Insurance protection, on the other hand, would restore confidence to RV enthusiasts to drive safely.
Welcoming investments in recreational vehicles could give local banks yet another product. Banks in Pakistan have tremendous capacity to finance RVs and earn nice profit shares with tenants. The State Bank of Pakistan (SBP) could formulate product characteristics, duration of financing, annual mark-up rates and eligibility criteria to be applied for financing of recreational vehicles. Like passenger vehicles, an RV is also an unfunded facility and therefore falls under the category of secured loans for banks and leasing companies.
The hospitality industry is directly associated with recreational vehicles. Just as hospitality investors build and maintain serviced housing at tourist sites, they have sufficient cash flow to build RV parking spaces and essential amenities. This could increase employment opportunities in the hospitality industry by 5%.
On a related note, mechanics and RV parts dealers would see new horizons for high ROI. The RV rental business could be a new segment, especially for small and medium businesses. People who cannot afford their own motorhome could acquire it through rental to cross the country and explore new trends in caravanning and peripatetic activities.
With the help of the National Tourism Coordinating Committee, the Tourism Development Corporation of Pakistan (TDCP) aims to increase the contribution of travel and tourism to GDP by more than $ 6 billion by 2025. In 2017, before the pandemic, the national tourism industry has earned more than $ 7 billion. The particular interest of the current government in the development of the industry is appreciable. The high targets set for earning tourism could be achieved by working on the potential gap available for the recreational vehicle trade.
Some laws are needed regarding the ownership, use, maintenance and parking of recreational vehicles. The TDCP, SBP, FBR and the Ministry of Transport, with the coordination of relevant private associations, could initiate the process of essential legislation and the manual for owning an RV in Pakistan.
While applying environmental assessment methods, economists would find the RV industry as feasible for the country as regular passenger vehicles. Honda, KIA and Suzuki are already in the business of manufacturing, exporting and assembling recreational vehicles of various types and capacities. The government could ask these big three automotive leaders to manufacture and assemble recreational vehicles compatible with Pakistan’s climate and user preferences.
Posted in Dawn, The Business and Finance Weekly, May 3, 2021