Indian Tourism Industry Has To Survive — it’s A Necessity

Indian tourism cannot be allowed to collapse as an outcome of Covid-19. It’s not an option which can be considered. 

The direct and indirect economic impact of the tourism industry in India is estimated at about 10 per cent of India’s GDP. This roughly puts the full-year economic multiplier value of tourism in India at approximately Rs 20 lakh crore. This value covers the whole tourism value chain across airlines, travel agents, hotels, tour operators, tourism destinations restaurants, tourist transporters, tourist guides, etc. These are across all the segments of tourism be they leisure, corporate travel, heritage, adventure, meetings incentives, exhibitions and events, religious and spiritual tourism and in upcoming high-value niche tourism products such as sea and river cruises, camping, rafting, golf tourism, jungle tourism, agritourism and many more. As a result, the Indian tourism travel and hospitality industry is said to impact The author is Consulting CEO, Federation of Associations in Indian Tourism & Hospitality 10-12 per cent of the country’s employment which is believed to cover 5 crore-plus direct and indirect jobs. These are across an estimated 53,000 travel agents, 1,15,000 tour operators (inbound, domestic, outbound), 15,000 adventure, 2700 MICE, 19,11,000 tourist transporters, 53,000 hospitality and more than 5 lakh restaurants.

There is no cash inflow expected for many quarters in FY20-21 as the key segments of the Indian tourism economy will be down. The international inbound tourists, inbound and VFR (visiting friends and relatives) and the outbound travel will remain mostly stagnant due to international flight curbs and tragic impact in most key tourism markets of India. Domestic travel and corporate travel within the country may slightly ease up post-lockdown but will be highly restricted due to fear of travel among elders and children, the new social distancing norms, corporate travel freeze and the shortening of the holiday season which will impact all leisure, adventure, heritage, spiritual, cruise and niche tourism segments. The meetings incentives exhibitions and events segment will be severely impacted due to meeting size restrictions. 

Tourism has one of the largest economic multipliers. In India, given its globally unique natural and cultural heritage, each rupee spent on tourism could have an economic multiplier value of tourism in India at approximately Rs 20 lakh crore.

This value covers the whole tourism value chain across airlines, travel agents, hotels, tour operators, tourism destinations restaurants, tourist transporters, tourist guides, etc. These are across all the segments of tourism be they leisure, corporate travel, heritage, adventure, meetings incentives, exhibitions and events, religious and spiritual tourism and in upcoming high-value niche tourism products such as sea and river cruises, camping, rafting, golf tourism, jungle tourism, agri tourism and many more.

As a result, the Indian tourism travel and hospitality industry is said to impact  multiplier of between 2.5-3 times. While this is India’s global competitive advantage in tourism, this can also quickly translate into a competitive disadvantage due to this pandemic, if not supported immediately as tourism jobs are spread across India.

With no visibility of cash inflows and in the absence of structured support the Indian tourism industry is now looking at large-scale bankruptcies and business closures. 

To prevent this and to ensure survival, it is extremely critical that tourism gets a dedicated interest and collateral-free long-term fund for paying salaries and operating costs and for a minimum of 12 months of complete waiver of fixed central and state statutory and banking liabilities without any penal or compounding interest. A National Tourism Council with legislative powers on the lines of the GST Council should be set up headed by the PM and constituted by the chief ministers and all cabinet ministers for immediate standardised response for survival and revival. 

If not addressed, these have the potential to set the Indian tourism, travel and hospitality industry back by many years. This is non-negotiable and should not be allowed to happen at any cost.