FAITH revises tourism value at risk guidance to 15 lakh crores

Indian Tourism reaches a ‘Now or Never’ inflection point

  • Worst period ever for tourism in 100 years.
  • Till a vaccine is found, the concept of tourism will be in dire threat
  • Tourism COVID Support Fund needed
  • RBI must give a multi-year moratorium on principle and interest to tourism
  • Stop the clock on all central and state government for statutory payments
  • 75 per cent value or minimum nine months of the almost 10 per cent of India’s GDP from Tourism at risk from collapse
  • Generations of tourism businesses and crores of jobs getting impacted

New Delhi: The Federation of Associations in Indian Tourism & Hospitality, the Policy Federation of all the national associations representing the complete tourism, travel and hospitality industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) and partner AIRDA have further revised its value upwards at a risk to Indian tourism to Rs. 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 Rs. five lakh crores from this pandemic.  FAITH revised this further during the quarter as the situation deteriorated and the value at risk was put at Rs. 10 lakh crores. This has been revised again to touch a value at risk of up to Rs. 15 lakh crores in terms of the economic output of tourism in India.

With the way the virus is progressing, tourism supply chains have broken down in India across all its key inbound, domestic and outbound markets and are not expected to recover for the next five months. This brings the total impact to a minimum of nine months starting from March this year.

The direct and indirect economic impact of the tourism industry in India is approximately estimated at ten per cent of India’s GDP. This roughly puts the full-year economic multiplier value of tourism in India at Rs. 20 lakh crores. A minimum of 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, and tour guides. Each of these segments of tourism is non-performing or underperforming and will stay that way for many months of this year.

READ:  India second highest contributor for IBM patents in 2020

This is evident across all segments of tourism. Pending refunds for travel agents,  shut down or vacant hotels and restaurants, empty or locked conventional venues, no order in the pipeline for tour operators, tourist transport lying locked in parking lots, laid-off workers, leave without pay staff, managers, the summer domestic, a bygone outbound holiday season,  no visible bookings for the peak of the 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 cruises, river cruises, camping, rafting, golf-film tourism, jungle tourism, agritourism 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 three to four 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 the organised and unorganised category of tourism could go as high as four crores.

FAITH has been requesting over the past five months that for the revival of any demand in tourism, it is the first important that the survival of tourism businesses has to first remain intact.

The following are immediately critical to maintaining the survival of tourism

  • A Tourism fund which can be used by tourism enterprises in India for taking care of their employees
  • A multi-year moratorium by RBI on principal and interest payments by tourism, travel & hospitality businesses
  • 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
  • Robust booking payments refund mechanism for travel agents & tour operators from airlines, railways, state tourism parks and other suppliers
READ:  'Some Muslims do not trust nation's scientists: Sangeet Som

Only this will keep the Indian tourism track and hospitality industry alive for a revival, it will keep the jobs intact and it will protect the exposure of the banking sector to tourism, thereby preventing their loans from becoming Non Performing Assets. 

Post the Unlock tourism is seeing some growth. But that is very limited short-haul domestic travel. It is not enough to make any tourism business viable.

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. It is closely coordinating with the Ministry of Tourism.  

It has also requested parliamentarians to raise the question as to ‘Why not tourism?’ for sector-specific support when the tourism industry contributes to pan-India jobs across urban and rural, ForEx , robust IT as well as GST collections, capex driven GDP and so on.

Tourism is a very unique business and a discretionary activity.  It is a means of unwinding, letting oneself immerse in local experiences. With each aspect of the travel journey now under the threat of virus from contact, this puts tourism at risk. Till the time there is a vaccine found, the very concept of tourism will be in question. 

This will be reflected in all data points of the Government whether in GST collections, banking data, PF, ESI or state-level fixed charges.

Tourism cannot be treated economically like any other business and now needs a fiscal as well as 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 travelers, almost 1.8 billion Indian domestic tourism visits, almost over five million expatriate Indians visiting back,  almost 28 million as well as outbound traveling Indians and almost $ 29 billion alongside ForEx earnings.

Subscribe us on The Siasat Daily - Google News
Back to top button