India’s tourism sector may lose ₹5 tn due to Covid-19
The coronavirus pandemic would have a debilitating impact on India’s tourism sector with the industry estimating an overall loss of ₹5 lakh crore and job cuts for 4-5 crore people.
New Delhi: The coronavirus pandemic would have a debilitating impact on India’s tourism sector with the industry estimating an overall loss of ₹5 lakh crore and job cuts for 4-5 crore people.
Of the total losses, the organised sector in the industry -- branded hotels, tour operators, travel agencies which are the mainstay of the sector – may be hit the hardest with an estimated loss of around ₹1.58 lakh crore, according to Confederation of Indian Industry estimates.
The industry body has said that branded hotel groups are set to lose as much as ₹1.10 lakh crore, online travel agencies ₹4,312 crore, tour operators (inbound and domestic) ₹25,000 crore, adventure tour operators ₹nearly 19,000 crore and cruise tourism ₹419 crore.
Sources in the Union Ministry of Tourism said the government is considering helping the sector with soft loans, working capital and deferment on loan repayments.
The ministry itself, in a presentation to a parliamentary panel on transport and tourism last month, had pegged the losses at ₹5 lakh crore, quoting industry estimates.
Other than the organised sector, the tourism industry also gives employment to small homestays, bread and breakfasts and small hotel operators and their services will also take a major hit.
The national federation of 10 tourism, travel and hospitality organisations of India, FAITH, said it was safe to say that the overall value of the losses could be in the range at ₹5 lakh crore, covering all aspects of the business.
¨The problem is that we have tourists who come into the country from October to March and there are people who travel within the country during summer holidays, pujas or in December and then there are people who go abroad.
“There is no one coming from outside. Our key source markets are heavily impacted due to coronavirus. We don't anticipate the market to come back to India in the next 12-18 months," it said
FAITH CEO Ashish Gupta recommended a salary corpus for the sector from the government.
As per the World Economic Forum (WEF), the coronavirus pandemic is putting up to 50 million jobs in the global travel and tourism sector at risk. Of the 50 million jobs that could be lost, around 30 million would be in Asia.
¨The industry is facing an existential crisis today," CII National Chairman Tourism Committee, Dipak Haksar said.
He said that overall “we estimate around 4-5 crore job losses of people who are directly or indirectly related to the tourism sector".
The Travel and Tourism sector is facing a “lockdown situation" with negligible demand of both international and domestic leisure and business traveler, he said.
“Occupancies in hotels have come to single digit and recoveries not expected in the near future. The industry expects to lose over 2 crore jobs and revenue loss could be of 60-70% this year. The tourism industry is gasping for oxygen and we urge the government to pronounce immediate sectoral relief for the industry," Haksar said.
The CII said the industry will see cash flows only beginning to improve in November, 2020 and perhaps get to normal levels by early 2021.
Haskar recommended short-term interest-free or low-interest loans for rebuilding business, 12-month deferment of all statutory dues and a moratorium of additional three to six months on all working capital principal, interest payments on loans and overdrafts.
He said these steps, among other sops for the industry, would bring in liquidity, allowing for business continuity.
Last year, 10.89 million foreign tourists arrived in India, while the number was 10.56 million the year before and 10.04 million in 2017.
With travel restrictions in place and the fear of the pandemic spreading, in February 2020, 1.01 million foreign tourists arrived in India compared to 1.08 million in February 2019, registering a year-on-year decrease of 6.6 per cent already.
This was the sharpest decline since 2015 and also the first in the month of February.