By SarabJit Singh
Managing Director, Travelite (India) a unit of KTC India Pvt. Ltd., Former Sr. Vice President of Indian Association of Tour Operators and Founder & Former Vice Chairman, FAITH.
The economic contribution of tourism economy is immense. The sector has continued to outpace the world economy for the last many years growing at 3.5 per cent as against the 2.5 per cent for the world economy in 2019.
As of 2019 the sector contributes nearly 10.5 per cent to the world’s GDP and jobs, employing over 330 million in Travel & Tourism sector.Worldwide, Travel & Tourism has emerged as one of the top export sectors and creator of employment.It is the biggest export sector of services sector economy. In the coming year more jobs are expected to come from Travel & Tourism than any other sectors. According to WTTC, over the past five years, one in four of all net new jobs created across the world has come from Travel & Tourism.
In India, amidst the raging debate on job creation in the last few years in the Indian economy, tourism has probably offered the best news.
According to National Council of Applied Economic Research (NCAER) about 13.9 million (direct and induced) additional jobs were created between 2014-15 and 2017-18 in the sector. About 8.1 million new direct jobs were created between 2009-10 and 2015-16, a 35 per cent growth over a seven year period and 1 per cent increase in the share of direct tourism jobs in total jobs in the economy.
Notwithstanding the current crisis, this trend, if backed by strong policy support and adequate incentives, will only gather greater steam and momentum, creating tens of millions of employment for the Indian economy. And not to forget that unlike other sectors of the economy that take years for the job benefits to show, tourism’s gives wider and quicker results.
The Covid-induced recession and the resultant loss of millions of jobs and loss of millions more looming all along the industry’s value chainhas once again made it imperative to revisit the socio-economic impact of the tourism sector. Today the country needs to create conditions for more jobs. Travel & Tourism is its best bet.And therefore, the underlining feature of any government policy for economy and job creation should be that ‘a quarter of future jobs will come from Travel & Tourism sector’ and can act as a catalyst of the Prime Minister’s vision of Atmanirbhar and entrepreneurial India.
Employment in tourism sector involves a disproportionately higher number of entrepreneurs, owners and proprietors. MSME is a big contributor of jobs in tourism. According to an OECD-ILO study around 50 per cent of employment comes from travel and tourism enterprises of less than 10 people and three-quarter of total tourism workforce work in enterprises of fewer than 50 people.
Furthermore, one direct jobs in the tourism sector creates 1.5 additional or indirect jobs, creating employment in far-flung areas, hinterlands and villages, local employment and women empowerment, stemming migration and huge tax net for the government. Furthermore, the sector has strong links with other sectors of economy. WTO hails Travel & Tourism as ‘a social force’ that impacts a wide range of industries.
Today the sector demands adequate political recognitionin order to create the massive impact envisioned in the draft National Tourism Policy, be it 33 million in tourist arrivals, US $ 56 billion in foreign exchange earnings, the Atmanirbhar Bharat, more entrepreneurial spirit and employment and more.
And therefore with a view on Corona’s impact on tourism and its larger and devastating impact on India’s socio-economic growth and prosperity, the industry today needs urgent support and mitigation plans and packages to help engineer swift and wider recovery and growth thereafter that are aligned to the targets put forth in the draft National Tourism Policy.
This is where SEIS or a more private-sector empowering schemes puts the Travel & Tourism industry in a unique position to herald a wider recovery plan for the country’s tourism economy, tourism exports and many other sectors of the economy and employment. Afterall, Travel & Tourism is essentially a private sector led industry and the Government recognizes this fact too.
Furthermore, a strong policy and incentives support mechanism is also the need of the hour in rekindling the domestic tourism market. As in travel agencies and tour operation businesses or tourist transport businesses, and others, a very large number of hotels and hotel companies are on the brink of imminent collapse. It is high time the government took adequate note of the sector whose economic contribution to the global GDP, according to World Economic Forum, is expected to rise nearly 50 per cent in the coming decade.
We have a lot of catching ups to do if we want India’s Travel & Tourism industry to contribute 15 per cent of the country’s GDP by 2030. This is what the sector’s global share is estimated to be in the coming decade, from about 10.5 per cent today. It is possible to make it happen for the country too.
