Home Open space The Plight of Indian Tourism Sector During Current Pandemic

The Plight of Indian Tourism Sector During Current Pandemic

550
1

Travelling leaves you speechless, and then turns you into a storyteller — Ibn Battuta.

The significance of travel and tourism has been historically comprehended and globally admired. India is globally acknowledged for its ample and conspicuous architecture traditionally due to which there is always a burgeoning demand for the tourism sector in the Indian economy as the tourism sector accounts for about 9.2 percent of GDP in 2018 and almost employed about 8.1 percent of total population and almost provided 26.7 million jobs in 2018.

There will be a long term ambiguity as the recent pandemic of Covid 19 has totally crippled the Indian tourism and its allied sectors. According to the Ministry of Civil Aviation (MCA), India is witnessing a 25% to 30% drop in inbound international visitors to the country in the backdrop of novel corona virus. According to government data, foreign tourist arrivals in February 2020 has dropped by 9.3% monthly and 7% yearly. In February 2020, there were 10.15 lakh Foreign Tourists Arrivals against 10.87 lakh in February 2019 and 11.18 lakh in January 2020. The Indian tourism industry would probably bear a revenue loss of Rs 1.25 trillion for the calendar year 2020 due to hasty shutdown of hotels and suspension of flights after the onset and spread of the unprecedented pandemic. A recent study by CARE ratings shows that the figure corresponds to a 40 per cent decline in revenue over the year of 2019. The report also predicted dismal circumstances as the Indian tourism industry is expected to book a revenue loss of Rs 69,400 crore, denoting a year on year loss of 30 per cent. There has been various travel restrictions imposed by the Indian government including global restrictions due to which forward bookings for various conferences and leisure travel bookings for foreign destinations have already been cancelled. In India, most of the summer holiday bookings preferably Kerala, Rajasthan and Goa have also been cancelled thereby almost ruining the domestic tourism. The following table shows how the tourism sector has been a prominent source of foreign exchange for the Indian Economy.

 

Foreign Exchange earnings from tourism in India

Year Earnings (US$ million) % change
2008 11832 10.3
2009 11136 -5.9
2010 14490 30.1
2011 17707 22.2
2012 17971 1.5
2013 18397 2.4
2014 19700 7.1
2015 21013 6.7
2016 22923 9.1
2017 27310 19.1
2018 28585 4.7

Source: (i) Reserve Bank of India, from 2000 -2015

(ii) Ministry of Tourism, Govt. of India, from 2016-2018.

A Dismal Indian Tourism sector

According to the report of KPMG, Indian Tourism sector has been severely hit and this crisis is bigger threat than the earlier ones such as 9/11 and the global financial recession of 2008-09. The report also suggesst that the hotel, aviation and travel sector together may incur a loss of about 85 billion as per the estimates due to travel restrictions and large scale cancellations. The impact is likely to be felt on both white and blue collar jobs. Outbound and inbound travels will be at an all time low. The report further predicts that Indian tourism and hospitality industry is on the verge of the potential job loss of around 38 million, which is around 70 percent of the total workfocre. India is considered to be fourth largest aviation market which is expected to see a big fallout in its international business but it’s strong domestic market is expected to help the faster recovery if the pandemic is controlled. Despite being a significant contributor to the country’s GDP and foreign exchange earnings, there is sense of complete distress and dejection in the tourism sector as the government ignored its pleas for assistance in the massive package Rs 20 lakh crore under the banner of AatmaNirbhar Bharat Abhiyan. Federation of Associations in Indian Tourism & Hospitality (FAITH) said that India’s employment which is believed to cover almost 5 crore including direct and indirect jobs. The industry has gone numb from a lack of any umbrella direction from the Government or without any fiscal & monetary support. There is an apprehension regarding the cash inflows for the Indian tourism as it may lead to large scale bankruptcies, business closures which will lead to job losses across cities, towns and hinterlands of India.

Some policy suggestions

The government should act as catalyst for the reformation of the distressed sector. There is a utter need for the policy reforms which could be in the form of interim relief to pay EMIs, installments, taxes, and salaries to employees for at least six months including moratorium on all principal and interest payments on loans and overdrafts, besides deferment of advance tax payments. There should a complete GST holiday for tourism, travel and hospitality industry for the next 12 months till the time of the recovery. Reserve Bank of India must facilitate faster clearance of banking credit related to Tourism and allied its sectors. There is a stronger need for the removal of fees for any upcoming licenses, permits renewal, excise for the hospitality and travel industry across the country. There is a need for all type of safety and security measures for the tourists visiting various places of the country so that they can feel comfortable. There is need for shifting the focus of the people to travel domestically within the country till the global tourism fraternity will take some time to get settled after this pandemic. The Government should focus on the development of numerous unexplored tourist spots in the North East regions of India as these regions are relatively in a better position regarding the spread of Corona virus.

References:

(1) https://www.tourmyindia.com/blog/impact-of-covid-19-on-travel-tourism-industry/

(2)https://www.indiacityblog.com/travel/how-will-covid-19-impact-travel-tourism-industry-1395/

(3)https://www.newindianexpress.com/business/2020/may/17/few-welcome-some-feel-ignored-in-govts-rs-20-lakh-crore-aatmanirbhar-package-2144554.html

(4)https://economictimes.indiatimes.com/industry/services/travel/indian-tourism-industry-in-a-state-of-disbelief-and-shock-faith/articleshow/75787447.cms?from=mdr

(5)https://www.livemint.com/news/india/travel-and-tourism-industry-in-shock-with-no-relief-measures-from-govt-11589722537599.html.

(6) http://tourism.gov.in/sites/default/files/Other/India Tourism Statistics at a Glance 2019.pdf.

(7) Report of KPMG (2020),”Potential Impact of Covid19 on the Indian Economy”

(8) Report of ILO (2020),”Impact of Covid on tourism Sector”.

1 COMMENT

LEAVE A REPLY