The Indian tourism and hospitality sector were adversely affected by the COVID-19 pandemic and saw substantial job loss. How do we pull this sector out of the COVID-19 trap?
The Government of India recently announced financial support for more than 11,000 registered tourist guides/travel and tourism stakeholders. It also said once international travel resumes, the first five lakh tourists will be issued visas free of charge. In the pre-pandemic period too, many initiatives were adopted to promote the tourism sector, such as providing e-visas under various categories for people from particular countries, Global Media Campaigns, the Heritage Trail and the Paryatan Parv celebration.
These measures are welcome. However, we need other long-term measures too, to tap the potential of this sector. What we need is disruptive innovation strategy which has the potential to create employment opportunities and increase revenue through private sector growth.
The Startup India initiative has boosted entrepreneurship. However, the travel and tourism startups need a bigger push. Innovative startups should be encouraged. Support from the government for ideation and access to finance are required.
A sector with potential
As per the estimates of the erstwhile Planning Commission, an investment of ₹1 million generates 78 jobs in the tourism sector. In the manufacturing sector, it results in just 18 jobs and in the agriculture sector, 45. The tourism sector, unlike many other sectors, can grow with smaller capital investments and that too without any industrial gestation period.
There is need to train the workforce in India, so that workers can develop the skills to perform jobs in the travel and tourism sector. The growth in this sector has multiplier effects on income generation as it is employment-intensive with less capital investment. The India Skill Report, 2019, estimates the Indian workforce to increase to about 600 million by 2022 from the current 473 million in view of the fourth industrial revolution. The tourism sector will have a major role to play in providing employment opportunities.
India improved its competitiveness in travel and tourism, from occupying the 65th position in 2013 and then the 40th position in 2017 and then the 34th position in 2019, as per the Travel and Tourism Competitiveness Report of 2019. But international arrivals have remained comparatively low, at around 9 to 10 million. Thus, there is a need to highlight the significance of public-private partnership to improve infrastructure and tackle the problem of end connectivity, which negatively affect the experiences of international travellers. The travel and tourism industry in India is also fragmented, hindering the ability of the sector to achieve its potential. This area needs to be nudged to embrace the digital revolution, so as to promote public-private initiatives, medium and small and sized enterprises’ growth while ensuring that India follows best practices from across the world.
Use of blockchain technology
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. There are examples worldwide on blockchain-based money solutions to kick-start local tourism industries, for instance. Blockchain enables the tracking of items through complex supply chains. Indian start-ups could also explore strategies along these lines. Blockchain ledger coupled with IOT devices for healthcare could have a positive impact on medical tourism.
There are challenges too with the advent of disruptive technologies. The government and regulators need to collaborate and design innovative mechanisms to address the challenges of these technologies, for smooth growth of the sector.
Surjith Karthikeyan is an Indian Economic Service (2010) officer , serving as Deputy Secretary to the Ministry of Finance. Views are personal