Tourism industry shocked at exclusion from stimulus package

The Indian tourism and hospitality industry on Sunday reacted strongly after 10 weeks of constant discussion with the government had come to a naught and they were directionless as no announcements were made in support of tourism.

The Federation of Associations in Indian Tourism and Hospitality (FAITH) said it was looking forward to a deep set of survival measures for tourism from the ₹20 lakh crore package announced over five days, which were not addressed.

The federation had gone into a state of disbelief and shock as it’s concerns were not addressed. FAITH members said the Indian tourism, travel and hospitality is believed to impact almost 10% of GDP directly or indirectly.

Jai Bhatia, vice president, Travel Agents Association of India, a FAITH member organisation, said they regret to note that over the last two months not one relief or urgent survival support had been provided to the travel agents and tour operators.

‘Feeling abandoned’

“The feeling is that the government has abandoned our sector, which is one of the largest revenue earners in the country, be it in terms of income tax, GST, or foreign exchange. Ours is a service sector and we promote travel and tourism across the world with a focus on India. Due to the lockdown, we are hit the most with air borders being sealed by India and no foreign or domestic travel being permitted,” he said.

Mr. Bhatia sad the last two months had been exceedingly difficult and multiple appeals to all ministries of the government were made and well heard. “However, we were only heard out and not responded too. We have shared with the government our concerns and how we shall be able to recoup, re-invent and redevelop our selves. The government teams appreciated our suggestions. But what we got from the package of ₹20 lakh crore is nothing,” he said.

FAITH said in a statement said it had already seen over one quarter of accumulated losses which began from February onwards. “There is no cash inflow expected for many quarters over FY 20-21 as the key segments of the Indian tourism economy will be down,” it said.

The international inbound tourists, inbound and visiting friends and relatives or VFR and the outbound travel will remain mostly non-performing due to international flight restrictions and tragic impact in most key markets tourism markets of India, FAITH observed.

“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 physical distancing norms, corporate travel freeze and the closure of the holiday season which will impact all leisure, adventure, heritage, spiritual, cruise and niche tourism segments,” Reji Philip, a south Mumbai-based travel agent said.

Consequently, all tourism service providers, the hotels, travel agents, tour operators tourist transporters, restaurants, guides will be compromised and the tourism industry of India will be operating with extreme under-capacities making most tourism businesses unviable on a cash operating basis.

To prevent this and to ensure survival, FAITH said it had proposed 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 which have not been addressed.

“The proposed MSME fund with its many underlying restrictions may have a very limited usage,” FAITH’s 10-member association noted. Indian tourism travel and hospitality is said to impact 10-12 % of India’s employment which is believed to cover almost 5 crore plus direct and indirect jobs.

Gurbaxish Singh Kohli, vice president, FHRAI and president, Hotel and Restaurant Association of Western India (HRAWI), said the apprehension in people’s minds coupled with a weakened economy will make getting back on their feet without government intervention, impossible for the industry.

“Migrants constitute approximately 65% of hotel industry’s employment and roughly 60% of hotels in the country are in the economy or mid-market segments. With migrants making their way back home, if and when we do resume business, we won’t have the same kind of manpower we had. Our projections indicate that within the next 30 to 45 days as many as 70% of hotels and restaurants put together will close down. The FHRAI calls upon the government for its urgent attention and pleads to bail us from this eventuality,” Mr. Kohli said.

FAITH members concluded that the industry had gone numb from a lack of any umbrella direction from the government or without any fiscal and monetary support. “With no visibile cash inflows, the Indian tourism industry is now looking at large scale bankruptcies, business closures which will lead to job losses across India. This has the potential to set back the Indian tourism, travel and hospitality industry by many years,” they said.

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Printable version | Jun 3, 2020 12:49:21 PM |

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