Tourism cannot be treated economically like any other business and needs NOW a Fiscal and Monetary structured package coordinated among all arms of Governments. The whole value chain of Indian tourism will be under threat – which catered to almost 10.8 million incoming foreign travellers, almost 1.8 billion Indian domestic tourism visits, almost 5mn – + expats Indians visiting back, almost 28mn + outbound travelling Indians and almost $ 29bn + Foreign Exchange Earnings (FEE).
Federation of Associations in Indian Tourism & Hospitality has further revised upwards it’s value at risk to Indian tourism to INR 15 lakh crores. FAITH’s first guidance which was calculated and was shared with the Government in March 2020 had put tourism’s economic value at risk at INR 5 lakh crores from this pandemic.
FAITH revised this further during the quarter as the situation deteriorated and the value at risk was put at INR 10 lakh crores. This has been revised again to touch a value at risk of up to INR 15 lakh crores in terms of the economic output of tourism in India.
Given the way the virus is progressing, tourism supply chains have broken down in India across all its key inbound, domestic and outbound markets and is not expected to recover for the next 5 months too making the total impact to a minimum of 9 months starting from March this year.
The direct and indirect economic impact of Tourism industry in India is approximately estimated at ~ 10% of India’s GDP. This roughly puts the full year economic multiplier value of tourism in India at ~ INR 20 lakh crores. Minimum three quarters of tourism will be fully impacted.
This value covers the whole tourism
value chain from airlines, travel agents, hotels, tour operators, tourism destinations restaurants, tourist transportation, tourist guides. Each of these segments of tourism is non – performing or under performing and will stay that way for many months of this year.
This is evident across all segments of tourism. Pending refunds for travel agents, shut down or vacant hotels & restaurants, empty or locked down conventions and meeting or wedding halls, no order pipelines for tour operators, tourist transport lying locked in parking lots, laid off or leave without pay staff , managers, the summer domestic and outbound holiday season gone, no visible bookings for the peak October – March season, meetings shifted to virtual apps , non – essential travel closed and so on.
Be it leisure ( inbound, outbound, domestic) corporate travel, heritage, adventure, meetings incentives, exhibitions & events religious, spiritual and in upcoming high value niche tourism products such as sea & river cruises, camping, rafting, golf film tourism, jungle tourism, agri tourism and many more across all states, this will the worst performing year for tourism in
a century.
Tourism has one of the largest economic multipliers and FAITH based upon its industry estimates believes that each rupee spent on tourism could have an economic multiplier of upwards of 3- 4 times more for India given its most globally unique natural and cultural heritage spread across the Indian hinterlands. The cumulative job losses for the full year both in organised & unorganised category of tourism could go as high as 4 crores.
FAITH has been requesting over the past 5 months that for revival of any demand in tourism, it is first important that the survival of tourism businesses in India has to first remain intact. FAITH has already raised requests over the past five months to the Prime Minister, the Finance Minister, to each of the 28 chief ministers , to the RBI, Niti Aayog, to tourism parliamentary panel, ministries of aviation, commerce, Finance and to more than 600 parliamentarians and is closely in coordination with ministry of tourism.
It has also requested the Parliamentarians to raise the question as to ‘why not tourism’ for sector specific support when tourism industry contributes to pan India jobs across urban & rural, forex , robust IT & GST collections, capex driven GDP & so on.
The following are immediately critical to maintaining the survival of tourism businesses:
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A Tourism fund which can be used by tourism enterprises in India for taking care of their employees.
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A multi-year moratorium by RBI on principal and interest payments by tourism, travel & hospitalty businesses.
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An immediate full year waiver of all central and state statutory liabilities be it PF , ESi, income taxes, GST , fixed power and utilities tariffs, property , excise , inter-state tourist transportation taxes and license fees, all without any accumulated or penal interest has to be done immediately.
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Robust booking payments refund mechanism for travel agents & tour operators from airlines, railways, state tourism parks and other suppliers.
