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<\/p>\nThe closing down of the iconic Taj Mahal last month is an evocative symbol of how India\u2019s travel and tourism landscape has changed due to Covid-19. The country\u2019s travel and tourism sector, more dependent than others on the free and confident movement of people, is staring at millions of disappearing jobs and a grey future.<\/p>\n
As a result of the nationwide lockdown, with no travel possible, the tourism industry is being \u201cbadly hit\u201d, a government press release said on April 10.<\/p>\n
Reports and experts suggest possible job loss across tourism and allied industries due to standstill caused by the Covid-19 outbreak across the world. \u201cThe Indian tourism and hospitality industry is staring at a potential job loss of around 38 million, which is 70% of the total workforce,\u201d due to Covid-19, a report by KPMG, a financial services and business advisory firm, said on April 1.<\/p>\n
As many as nine million jobs \u2013 six times the population of Goa \u2013 in the travel and tourism sector are at risk in India, according to the World Travel and Tourism Council, a global forum to raise awareness about the industry.<\/p>\n
If this trend continues as the Covid-19 crisis progresses, it will be a setback for national employment. The sector accounts for 12.75% of employment \u2013 5.56% of it direct and 7.19% indirect. Over 87 million people were employed in the tourism industry in 2018-\u201919, according to the ministry of tourism\u2019s annual report for 2019-\u201920.<\/p>\n
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Officials of travel and tourism companies tell a uniformly dismal story of cancelled bookings from February 2020 leading to \u201ccomplete paralysis\u201d by mid-to-late March 2020. \u201cThe industry has come to a standstill as the crisis has hit its nerve centres \u2013 the airlines and railways,\u201d Ajay Bali, managing director of the Mumbai-based BCD Travel India, the Indian arm of the Dutch corporate travel management firm, told IndiaSpend. \u201cAnd in the next 45 days, we do not even know if there will be recovery.\u201d<\/p>\n
\u201cThis is one of the worst crises to hit the tourism industry and it has impacted all its segments \u2013inbound, outbound and domestic, and leisure, cruise, adventure, corporate meetings, conference, and exhibitions,\u201d said Unmesh Vaidya, currently business head at Iqomi Travel Services, a Mumbai-based startup specialising in corporate services such as meetings, incentive trips and conferences.<\/p>\n
Bali described a job situation in flux, with some employees working from home \u2013 to handle cancellations, for instance, others asked to take their allotted leave, and those with no leave asked to go on leave without pay. Senior staff, he said, had been asked to take 30%-40% pay cuts.<\/p>\n
While there were reports, he said, that blue-collar and contractual staff had been laid off at some travel firms, \u201cactual retrenchment will only happen at the end of April if the lockdown is extended\u201d.<\/p>\n
As of April 12, seven states \u2013 Odisha, Punjab, Rajasthan, Maharashtra, Karnataka, West Bengal and Telangana \u2013 had extended the 21-day nationwide lockdown.<\/p>\n
Meanwhile, the current lockdown extends the curbs imposed on Kashmir in August 2019, hitting the livelihoods of 144,500 Kashmiris employed in the tourism and handicrafts sector, as IndiaSpend had reported on January 28.<\/p>\n
Ravi Kumar, an employee of one of India\u2019s largest travel agencies, with 22 years\u2019 experience, was asked to go on leave without pay for 15 days in March, even before the lockdown was announced, as Covid-19 hit his firm with cancellations from end-February all the way to June 30, 2020.<\/p>\n
The timing was particularly unfortunate: \u201cThis is a major season for travel and airline companies,\u201d Kumar told IndiaSpend. \u201cA lot of bookings are made in February-May, whether for students travelling abroad, for leisure and vacation travel, for corporate travel, for religious and pilgrimage travel, and by elderly people visiting their children abroad.\u201d<\/p>\n
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For the many thousands of freelancers making a living out of travel and tourism, the situation is as bleak. \u201cAll our assignments have been cancelled,\u201d said Naina Thakkar, a professional tour guide in Mumbai for over 40 years, and part of a group of over 100 guides who work on a per-assignment basis with travel agencies and foreign tourists arriving on cruise ships. Some of her colleagues had not been paid since November 2019, she said, since cash-strapped travel agencies had held back their payments due to the worldwide slowdown.<\/p>\n
While the tourism sector has struggled even before the pandemic, it remains, according to the Economic Survey 2019-\u201920, \u201ca major engine of growth, contributing to [gross domestic product] and foreign exchange earnings\u201d. The share of tourism in India\u2019s GDP was 5.06% in 2016-\u201917, down from 5.81% from 2014-\u201915, according to the tourism ministry\u2019s latest annual report cited above.
\nNo clear timeline<\/p>\n
While every industry is facing uncertainty over its future course with the unabated global advance of Covid-19, fears are more visceral for the tourism industry. As those in the industry point out, information technology, banking\/financial services and pharmaceuticals have no doubt felt the sting of the virus, but they are not as dependent on the physical mobility of people, and their comfort with the idea of travel, both of which have been casualties of the current crisis. Will it take nothing short of a vaccine, they wonder, for people to feel confident enough to undertake non-essential travel again.<\/p>\n
Vaidya is relatively optimistic. \u201cI foresee a turnaround by August this year with restaurants, bars, event venues, amusement parks, hotels, flights leading our recovery, in that order,\u201d he said.<\/p>\n
\u201cThe situation looks bleak,\u201d said Kumar, \u201cas people will not be willing to travel even when the lockdown is lifted. Domestic travel may take off again, but people will not think of travelling abroad soon.\u201d<\/p>\n
He added that agents were currently caught between passengers and airlines, with the former wanting full refunds and the latter asking them to change dates of travel free of cost, but with additional charges on account of fare differences. \u201cPeople don\u2019t want their money stuck for so long. The magnitude of the virus\u2019s spread has led many to push their travel plans to next year,\u201d he said.<\/p>\n
Bali expressed the hope that a mid-term recovery would start in June-July. \u201cAssuming India recovers by mid-May, people will start travelling within the country,\u201d he said, adding, \u201cthings will be back to normal by January 2021\u201d. But even this prognosis is beset with uncertainty: \u201cIf international travel resumes, the first people to travel will be students and labourers. The leisure sector will be very slow to start its recovery.\u201d<\/p>\n
Medium and small enterprises dominating the tourism and hospitality sector are likely to be severely impacted by the pandemic, at least till the month of June, according to Mridula Tangirala, head of tourism at Tata Trusts. \u201cJuly to September have always been lean for tourism in India except for a few select pockets. The rate of revival after the month of October cannot be predicted right now as the full impact of the crisis is still unknown,\u201d she told IndiaSpend.<\/p>\n
However, there was no way to make up for the income already lost, Sabina Dewan, president and executive director of Just Jobs Network, pointed out. She said that states relying heavily on income from tourism, such as Kerala and Himachal Pradesh, would feel the effects more.<\/p>\n
Internationally, the situation is bleak too, with several countries having restricted movement within and across cities and borders, and travellers themselves putting plans on hold, for both financial reasons and health anxieties.<\/p>\n
As many as 75 million travel and tourism jobs are at risk worldwide, one in eight of them in India, according to the World Travel and Tourism Council. The council, which had earlier projected a 50-million global job loss due the pandemic, said in a release on March 25: \u201cThis latest projection of a 50% increase in jobs at risk, in less than two weeks, represents a significant and worrying trend, with an astounding one million jobs being lost every day.\u201d<\/p>\n
This comment suggests that estimates could turn even more bleak with the further spread of the pandemic. Travel and tourism was the second fastest growing sector in the world at 3.9% in 2018, after manufacturing which grew by 4%, according to World Travel and Tourism Council.<\/p>\n
The Asia-Pacific region may lose 49 million jobs due to the pandemic, causing a loss of nearly $800 billion to travel and tourism GDP, the council\u2019s most recent analysis suggests. More than half of these jobs \u2013 25.6 million \u2013 are in China, where Covid-19 originated.<\/p>\n
The nationwide 21-day lockdown from March 25 suspended domestic flights, trains and inter-state buses, and instructed all Indians to stay at home. The government had already restricted foreign arrivals earlier in March, first suspending tourist visas and visa-free travel for those holding Overseas Citizen of India cards, then prohibiting arrivals from Covid-19 hotspots, and finally canceling all international flight landings from March 22 \u2013 about 700 a week.<\/p>\n
The government called for the suspension of all hospitality services with exceptions only for those who were accommodating tourists and people stranded due to the lockdown, and those designated as quarantine facilities.<\/p>\n
Thus, foreign tourist arrivals in India \u2013 which saw a 9% decline in February over January and a 7% fall compared to February 2019 \u2013 plummeted in March 2020.<\/p>\n
Likewise, occupancies across hotels in India crashed, by over 40% in many cases; and cancellations were at an all-time high, said a March 23, report by ICRA, independent investment information and credit rating agency.<\/p>\n
The United States and the United Kingdom together accounted for 24% of India\u2019s foreign tourist arrivals in February. These two countries are among the worst affected by Covid-19, reporting over 600,000 cases, according to data from Johns Hopkins University.<\/p>\n
Domestic tourist visits numbered 1.8 billion in 2018, a 12% increase from 2017, the tourism ministry\u2019s 2019 report said. With the lockdown, this too has come to a standstill. The shutting down of the iconic Taj Mahal on March 17, which attracted over seven million visitors \u2013 both domestic and foreign \u2013 in 2018-\u201919, was an evocative symbol of the dramatically altered tourism picture. The lockdown has also led to the closure of pilgrimage sites and temples across states, affecting local businesses and employment thriving around them.<\/p>\n
The tourism sector was already in trouble before the rise of the pandemic, experiencing the impact of the global economic slowdown. Growth decelerated in 2019-\u201920 with weaker growth in foreign tourist arrivals and consequently in foreign exchange earnings from tourism, according to the Economic Survey 2019-\u201920.<\/p>\n
The revenue losses in the travel and tourism sector would run into multiple quarters, Pavethra Ponniah, Vice President at ICRA, estimated: \u201cSeveral hotels have already let go of all contractual labour. While there are discussions on pay cuts, we are not hearing of permanent labour cuts yet. A prolonged downcycle could, however, lead to those also being pruned.\u201d<\/p>\n
The indirect impact in the unorganised sector, including tourism, hospitality and transport, would be much bigger, said Santosh Mehrotra, Cambridge Professor of Economics and Chairperson, Centre for Labour Studies, Jawaharlal Nehru University. \u201cCasual workers are employed in the urban and rural areas, but it is in urban areas where the economy has been brought to a standstill,\u201d he said. All the unorganised sector jobs in urban areas would be affected and slowly the effect would be felt in rural areas.<\/p>\n
The restaurant industry in India, with an annual turnover of approximately Rs 4 lakh crore, provides direct employment to more than seven million people \u2013 11 times the population of Sikkim \u2013 according to Anurag Katriar, president of the National Restaurant Association of India. \u201cThe sector is fighting a grim battle for its survival,\u201d he said. \u201cWe are staring at almost zero revenue in the immediate term and at least a drop of 50% for months thereafter.\u201d The biggest concern, he added, was the fate of the millions employed in this sector.<\/p>\n
\u201cNearly 15% of the jobs in the hotel and restaurant industry will be impacted once the lockdown is lifted, as the industry will not see an immediate surge in demand,\u201d estimated Sukesh Shetty, general secretary, Indian Hotel and Restaurant Association, the largest association of restaurants and bars in Maharashtra with over 35,000 members.<\/p>\n
About two million people, many unorganised workers, are employed across the state in these hotels, restaurants and bars, according to Shetty. For restaurant owners, one of the uncertainties lying ahead is how comfortable people feel with the idea of eating out, even after the lockdown, when fears about hygiene and infection have taken root.<\/p>\n
\u201cI have never seen such a situation in my lifetime,\u201d Shetty told IndiaSpend, explaining that about half the staff working in hotels and restaurants had left Mumbai in fear of the epidemic. Losses, he said, would become clearer only after a proper assessment of the damage to businesses and their supply chains. \u201cFor owners to bear the burden of a big workforce without income or government intervention is going to be tough,\u201d he said. Without support, many establishments would close down, he warned.<\/p>\n
The hotel and restaurant industry is seeking relief measures from both the state and central governments such as interest-free loans from banks, waiver on all licence fees, the supply of subsidised food grains and a tax holiday for a period of one year in order to maintain jobs and support the industry. They also expect to restore input tax credit on Goods and Services Tax \u2013 i.e. claiming the credit paid on the purchase of goods and services which are used for the furtherance of business \u2013 which will help them bring down fixed operating costs.<\/p>\n
\u201cThe NRAI is grateful to the government and the RBI for their recent measures aimed at mitigating some of our woes,\u201d Katriar said. \u201cDeferment of GST payments, concession extended on PF contribution and permission to employees to partially withdraw from their PF accounts, a moratorium on EMIs and easing of interest rates are all steps in the right direction,\u201d he added.<\/p>\n
A linked sector, aviation, could incur losses worth Rs 27,000 crore in the first quarter of 2020-\u201921, according to the Centre for Asia Pacific Aviation, India, a consultancy and advocacy agency. These estimates are based on the assumption that all domestic and international operations will remain grounded until June 30. \u201cEven with some partial resumption of services in May and June, the financial outcomes may not change significantly,\u201d it said.<\/p>\n
\u201cThe aviation sector was struggling in any case,\u201d Mehrotra said. \u201cFor decades we have been trying to sell off Air India, but now markets have fallen and there is no possibility of selling it for many months again.\u201d<\/p>\n
Dewan of the Just Jobs Network estimated that India\u2019s air transport market employs over 400,000 people and another 940,000 are employed in related supply chains. Apart from the impact of travel restrictions on the industry, and the likely impact of people\u2019s fear of travel, she also drew attention to the cost of complying with new health and hygiene guidelines, for both the aviation and hospitality sectors.<\/p>\n
CARE Ratings, a credit rating agency, estimated in a release on March 25, 2020 that the passenger growth of airlines in India would fall sharply and register a negative 20-25% growth for 2020-\u201921. The sector was already in trouble. The passenger traffic for domestic airlines grew by 3.7% during 2019-\u201920 registering \u201ca distinct fall\u201d from the 15.1% growth rate achieved in the corresponding period in the previous financial year. \u201cThe general slowdown in the economy since the start of FY20 has led to a sharp moderation in airline passenger growth operated by domestic airlines,\u201d the report said.<\/p>\n
Experts have emphasised on the need and potential to tap domestic tourism and the impact that social media has in capturing the imagination of potential travellers as the way forward to come out of the situation.<\/p>\n
\u201cChina is a very big inbound market and that market is going to be damaged,\u201d Dipak Deva, co-chairman, FICCI Tourism Committee and managing director, Sita, Travel Corporation India and Distant Frontiers, said in a webinar on \u201cIndian Travel and Tourism Industry: Impact, Survival & Roadmap to a Better Future\u201d on April 6. \u201cIt is a very big opportunity for India to try and tap the business when it revives, unlike the manufacturing sector that let it go.\u201d<\/p>\n
\u201cWe have to go back to the strength of the domestic market to fuel its own consumption and if we get that engine going, then we will be far less touched in a negative way,\u201d Rupinder Brar, additional director general with the Ministry of Tourism, said during the webinar. \u201cOver the next few weeks, if cases in India do not spiral \u2013 the way it has impacted western Europe or America \u2013 then there is an opportunity in the domestic market and we need to capitalise it,\u201d she said.<\/p>\n
<\/p>\n
– Chaitanya Mallapur<\/strong> The sector employs 12.75% of the country\u2019s workforce The closing down of the iconic Taj Mahal last month is an evocative symbol of how India\u2019s travel and tourism landscape has changed due to Covid-19. The country\u2019s travel and tourism sector, more dependent than others on the free and confident movement of people, is staring at […]<\/p>\n","protected":false},"author":1,"featured_media":41979,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090,2,20],"tags":[3444,3222,3442,3443,127,3439,3441,3243,3440,776],"class_list":["post-41978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-coronavirus","category-featured","category-india","tag-aviation","tag-covid-19","tag-foreign-travel","tag-hotels-and-restaurants","tag-india","tag-job-losses","tag-kpmg-report","tag-lockdown","tag-tourism-industry","tag-travel"],"yoast_head":"\n
\nThis article first appeared on IndiaSpend,
\na data-driven and public-interest journalism non-profit.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"