The Impact of Covid-19 on Travel & Tourism Industry in India and it’s Future

Posted on by Sandy
The Impact of Covid-19 on Travel & Tourism

The COVID-19 pandemic has probably been the most devastating of the financial and social crisis of recent times, leading to the suspension of almost all economic activity and forcing a countrywide lockdown. While the INR 20 lakh crore economic recovery has assuaged some apprehensions, some sectors that have been more affected than others, and sectors that could help with economic recovery have been overlooked. 

Tourism, which contributes 5.06 percent in India’s GDP (2016-17) is one such industry that has been ignored in this recovery package. The ongoing pandemic, travel restrictions, and the countrywide lockdown have brought the entire tourism industry to a standstill, and unlike other sectors, tourism will take longer to recover especially leisure tourism. This will have a direct impact on states like Uttarakhand, Rajasthan, Kerala, Himachal Pradesh, Goa, Sikkim, and other northeastern states which depend extensively on tourism as a source of state revenue.

Let’s talk first about the role of travel & tourism in India:

  • Travel & tourism contributed 9.2 percent to India’s GDP in 2018, creating 26.7 million workers that year. It sector not only hires employees in towns but also provides the agricultural community with an earnings base.
  • The tourism industry accounts for 12.75 percent of India ‘s jobs, 5.56 percent being direct and 7.19 percent being indirect.
  • Over 87 million people were employed in the travel sector in 2018-19 in India, according to the Ministry of Tourism (MOT) annual report for 2019-20.
  • It is estimated that in India, branded and organized hotels’ annual revenue is ₹38,000 crore ($5 billion).
  • The restaurant industry in India has an annual turnover of approx ₹4 lakh crore ($53 billion). This industry provides direct employment to more than 7 million people.
  • India’s air transport industry employs over 400,000 people directly and 940,000 are employed in related supply chains.

Effects of Coronavirus on Travel & Tourism in India: 

  • On account of Coronavirus, the Indian tourism and hospitality industry is expecting a potential job loss of around 38 million.
  • In the third week of March 2020 itself, the hotel sector saw a decline of more than 65% in occupancy levels as compared to the same period in 2019.
  • The demand for turbine fuel has decreased significantly with foreign and domestic transport on a halt.
  • Indian Association of Tour Operators (IATO) estimates the hotel, aviation and travel sector together may suffer a loss of about ₹85 billion keeping in mind the travel restrictions imposed on foreign tourists.
  • The impact of Covid-19 would be felt on both white and blue-collar jobs.
  • India’s outbound and inbound travel will witness an all-time low.
  • The Indian restaurant industry predicts almost zero sales in the short future, with a 50 percent decline in the months to come.
  • If the condition will not change by the end of June 2020, at least 30 percent of hotel and hospitality sector income will be impacted.
  • There is a threat of job loss of nearly 15% in the hotel and restaurant industry once the lockdown is lifted, as they will not see an immediate surge in demand.
  • The aviation industry in India could incur losses worth ₹ 27,000 crores ($3.3-3.6 billion) in the first quarter of 2020-21.
  • The passenger growth of airlines is likely to fall sharply to a negative 20-25% growth for 2020-21.

The current coronavirus scenario in the country has impacted tourism, hospitality, aviation, and transportation at large. With states being locked down, people have dropped their plans of going out on a vacation with their friends and families. A halt on tourist movement to contain the spread of the viral infection has been announced which has resulted in the closedown of various tourist destinations in India that are a popular choice amongst people. If you are one amongst those who were earlier planning to head out, here’s a list of the top tourist places that have been shut down because of the pandemic.

1. TAJ MAHAL, AGRA

Taj Mahal Agra

The Taj Mahal, which comes on the top of the list has been closed till 31 March in view of the Coronavirus. Along with this, the namaz in the royal masque of the Taj Mahal was only observed by ten people of the Archaeological Survey of India (ASI). Not only this, but the Fatehpuri mosques protected by the ASI at the eastern gate of the Taj have also been closed.

2. RED FORT, DELHI

Red Fort Delhi

Many historic places including the Red Fort, Qutub Minar, and other famous places of Delhi have been closed till 31 March.

3. STATUE OF UNITY

Statue of Unity

Gujarat government has banned entry to the Statue of Unity located in Narmada district till March 25 due to Coronavirus.

4. SHIMLA

Shimla

Himachal Pradesh has closed the entry of tourists in the state to prevent the infection of coronavirus. After this, there is a ban to visit Shimla, Manali, Dharamshala, Dalhousie, etc. located in Himachal. Hotels, homestays, etc. have been closed in the tourist town till 31 March.

5. NAINITAL

All hotels in Uttarakhand’s Nainital will remain closed from March 21 to 31st. Praveen Sharma of the North India Hotel Association gave this information.

6. KERALA

In the wake of the growing number of coronavirus infections in the state, all the all eco-tourism spots have been closed till March 31. 

7. JAIPUR

Famous places Rajasthan including Jaipur, Jodhpur, Udaipur, etc. have also been closed due to Coronavirus.

8. GOLDEN TEMPLE

Golden Temple, one of the famous places in India, has also been locked down to control the widespread coronavirus.

Things to Know

  • The tourism sector was already facing some trouble before the rise of the Covid-19 pandemic due to the impact of the global economic slowdown.
  • World economic development decelerated in 2019-20, resulting in a slower rise in international tourist arrivals and tourism foreign-exchange earnings in India.
  • With more than 60% of organized hotels in India shut, recovery should be expected gradually.

Recovery Plans

As per the above argument, we are looking at a gradual or even sluggish recovery scenario of the Indian tourism industry, but the crucial thing to concentrate on is that after all there is scope for recovery. Leaders in the industry have suggested several proposals for the revival of the market.

  • Experts have emphasized the need to focus on the potential of domestic tourism and try to gain some profit through it.
  • ICC is recommending the creation of a ‘Travel & Tourism Stabilization Fund’ with a direct flow of benefits to each entity to avoid financial and work loss.
  • The experts also advocate cost optimization at all stages of service.
  • This is therefore advised that the FF&E Reserves be used with care. The hotel owners will have to be assisted by operators.
  • Any dry powder that is available in the market should be utilized more on buying operating assets rather than building new ones.

The international picture

The scenario is still grim worldwide, with many nations limiting mobility inside and around cities and boundaries, and travelers placing plans on pause for both financial purposes and safety anxieties themselves.

According to the World Travel and Tourism Board, as many as 75 million travels and tourism workers are at risk worldwide, one of every eight of them in India. In a March 25 statement the committee, which had earlier predicted a global work loss of 50 million due to the pandemic, said: “This 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.”

Foreign travel

Foreign Travel

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 – about 700 a week.

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.

Bottom Line

Coronavirus may have brought the pace of the travel & tourism industry in India to a complete halt, but it hasn’t yet defeated the spirit of the people involved in this sector. The blow may seem harsh but there’s still hope left. We believe, if we persevere and stay in this together, you as travelers and we as operators, we will get through this what right now feels like a nightmare. Our request to you is to not give up on your plans for domestic travel this year. Once things are in place, we will be back with our unmatched travel services. Remember like everything else in our lives, This Too Shall Pass.

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