India Tourism Shocked: No COVID-19 Assistance
The India travel industry seems to have gotten used to being treated shabbily when it comes to budgets, but it was surely expecting some solid mention in the massive investment plans announced in the past few days. But that was not to happen, leaving India tourism shocked.
Weeks of memos and suggestions by the leadership to the powers that be obviously had no impact, much to the regret of tourism stakeholders.
The Federation of Associations in Indian Tourism & Hospitality (FAITH), the policy federation of all the national associations representing the complete tourism, travel, and hospitality industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) went on record to say that the India tourism industry has gone into a state of disbelief and shock over this development – or should we say non-development.
The India tourism industry was looking forward to a deep set of survival measures for tourism from the 20 lakhs crore package announced over 5 days ago, but these measures were not addressed.
The India tourism, travel and hospitality industry is believed to impact almost 10% of GDP through its direct and indirect sources. It has already seen over one quarter of accumulated losses which began from February onwards due to COVID-19.
There is no cash inflow expected for many quarters over FY 20-21 as the key segments of the India tourism economy will be down. The international inbound tourists, inbound, and VFR – (visiting friends and relatives), as well as outbound travel will remain mostly non-performing due to international flight restrictions and the tragic impact of the coronavirus in most key tourism markets of India.
Domestic travel and corporate travel within the country may slightly ease up post lockdown but will be highly restricted due to fear of travel among elders and children, the new social distancing norms, corporate travel freezes, and the closure of the holiday season which will impact all leisure, adventure, heritage, spiritual, cruise, and niche tourism segments. The meetings incentives exhibitions and events segment will be severely impacted due to meeting size restrictions.
Consequently, all tourism service providers, the hotels, travel agents, tour operators, tourist transporters, restaurants, and guides will be compromised, and the tourism industry of India will be operating with extreme under-capacities making most tourism businesses unviable on a cash-operating basis.
To prevent this and to ensure survival, FAITH had proposed a dedicated interest- and collateral-free long-term fund for paying salaries and operating costs and for a minimum of 12 months of complete waiver of fixed central and state statutory and banking liabilities without any penal or compounding interest. All of this has not been addressed.
The proposed Micro, Small, and Medium Enterprises (MSME) fund with its many underlying restrictions may have a very limited usage.
FAITH and its 10 member associations (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) have been constantly dialoguing with all factions of the government over the past 10 weeks – with the PMO; ministries of finance, commerce, aviation, and tourism; with RBI; with all 28 chief ministers; with Niti Aayog; and with the Empowered Group 6.
India tourism, travel, and hospitality is said to impact 10-12% of India’s employment which is believed to cover almost 5 crore plus direct and indirect jobs.
The industry has gone numb from a lack of any umbrella direction from the government and without any fiscal and monetary support.
With no visibility of cash inflows, the India tourism industry is now looking at large-scale bankruptcies and business closures which will lead to job losses across cities, towns, and hinterlands of India. This has the potential to set back the Indian tourism, travel, and hospitality industry for many years.