As countries affected by the coronavirus pandemic ease lockdown restrictions and allow for limited movement of people in trains and flights, several industries have begun to function cautiously. For one major revenue generator in India, however, prospects continue to look glum in the near future. The tourism industry which impacts close to 10% of the country's Gross Domestic Product (GDP), has seen its revenues plummet to zero in the last two months.
Layoffs have begun across the sector in travel, tourism and hospitality and are likely to continue without aid from the Central government.
"With no visibility of cash inflows the Indian tourism industry is now looking at large scale bankruptcies, 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 by many years," said 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, in a petition to the Centre on May 17.
The industry expressed disappointment in the government's failure to address their issues when discussing the disbursement of the Rs.20 lakh crore relief package that was announced. FAITH stated that the entire industry was in shock and disbelief over this.
"Indian tourism travel and hospitality is said to impact 10-12% of India’s employment which is believed to cover almost 5 crore + direct and indirect jobs. The Indian Tourism industry was looking forward to a deep set of survival measures for tourism from the ₹ 20 lakhs crore package announced over 5 days, which however were not addressed. The industry has gone numb from a lack of any umbrella direction from the government or without any fiscal & monetary support," it added.
What does the industry expect?
To prevent further layoffs and ensure survival of the industry, FAITH had proposed a dedicated interest and collateral free long term fund for paying salaries & operating costs. They have further suggested a minimum of 12 months of complete waiver of fixed central and state statutory and banking liabilities without any penal or compounding interest which have not been addressed.
Shahul Hameed, Chairperson of the southern chapter of the Travel Agents Association of India also agrees that the proposed MSME fund with its many underlying restrictions may have a very limited usage.
"We have lost revenue for the last two and a half months. This means that there is no working capital for electricity bills, rent, wages and other expenses. At least 50% of our revenue comes from the first half of the year especially during summer holiday. Even bookings meant for May and June have been cancelled," he says.
To tide over this crisis, he says just loans offered by the government will not suffice.
"There will be certain eligibility criteria for this loan that we can't all match. So that is of no use to us. We need a grant to cover basic capital requirements and a Goods and Services Tax(GST) holiday," he says. "The rest of the world is offering the tourism industry several concessions. Canada is paying 70% of salaries while Singapore is giving allowance. Why can't India do the same?" he asks.
Change in post lockdown tourism
India, on an average has 20 million outbound tourists per year and 11 million inbound tourists. But uncertainty looms ahead for the tourism industry even if restrictions for travel within and outside the country are lifted.
Hari Ganapathy, the founder of Pickyourtrail, a travel planning platform, says that the industry is bracing for the worst.
"We think people will start travelling in October, November or December and have to be prepared for that," he says. "But these will mostly be travellers who have relatives without any comorbidities staying with them and have double income," he predicts.
However, even if people choose to travel, government policies could prove to be tricky.
"Let's take south India for instance. Tamil Nadu has a high number of tourists who come here for medical tourism. But now after COVID-19, this will reduce for some time because people will not want to risk infections in hospitals when the state still has a high number of cases. Kerala with a lower number of cases could be bracing to open up for tourists for the winter season which is when they have a large footfall," explains Hari. "But the number of tourists allowed could be based on government policies," he adds.
Travel agencies are expecting countries and individual states to have varied standard operating procedures.
"For instance, to board the airline to a particular country your temperature could be checked and you could be barred if you have a fever. So you can't even board the flight then," he explains. "The number of people allowed to board a flight could decrease and therefore the prices may be affected," he adds.
And when it comes to stay, he predicts that people would chase brands like a Taj or Marriott, hoping for better safety standards.
"Something like a homestay or a hostel may not even be considered," he says.
Shahul Hameed summarises that a 'new travel world' will have to be imagined.
"Even if people are travelling in cars, we may have to take into account physical distancing and reducing the number of people to 3 instead of 5," he says. "When they go to another country, they may want to stay away from matured markets to avoid crowds. So the costs may increase for travel," he adds.
Further, they expect that certificates declaring travellers as COVID-19 free will be required, which means the cost of testing will fall on the customer.
"Even to enter another state or country, tests could be made mandatory," says Hari.