Significance of Relation between Retailing and Tourism in Designing Credit Derivative Products for Financing Tourism and Retailing Infrastructure

Abstract:     
'Incredible India' has been established as a brand by government initiative, which can be used as a marketing tool to promote the Indian authenticity of their products. At the same time, India tops A T Kearney’s list of emerging markets for global retailers for the last two years.

'Who drives whom?' is the million dollar question if, the relationship between tourism and retailing is considered. Such relationship seems to be beyond imagination. This relationship is playing a major role in generation of revenue stream for both sectors. The volume of the revenue stream is critical factor for credit rating of the players in these sectors. And credit rating has a huge impact on designing credit derivative products. This financial instrument can be beneficial for hotel industry, travel and tours business, shopping mall developers, corporate chains focused on themed retailing, airport retailing, highway retailing etc. Any study done in this area assumes more significance because of the impending Commonwealth Games 2010 in New Delhi.

This research work has been completed in four major stages. In the first stage, relationship between retailing and tourism is studied in Indian context. Impact of this relationship on revenue steam is studied in second stage. The third stage of this study focused on the means of financing in the above mentioned sectors. Their effectiveness on reducing non-performing asset for financing firms has been incorporated in this study. Finally, a conceptual framework has been developed to design credit derivative products to manage financial risk in retailing and tourism sector.

Number of Pages in PDF File: 23

Keywords: retail, credit derivative products, thematic tourism, credit rating

JEL Classification: G24,G30, G32, G39, L83

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