New Delhi: India’s travel and hospitality industry is headed for its worst crisis with an at least Rs 8,500-crore hit in revenues due to suspension of most visas over fears of spread of coronavirus that would result in lower footfalls and drop in business for tour operators, hotels and aviation industry.
Hotels and tour operators have seen a spurt in cancellations particularly after the WHO declared the outbreak a pandemic. Tourists cancelled travel, hitting hotels, airlines and tax collections after the government suspended most visas in a bid to halt the spread of coronavirus.
At least 40 per cent of rooms across big chains of hotels are going empty while banquet bookings have been cancelled, industry officials and associations said. Tour operators estimate January-March quarter earnings could fall by more than 60 per cent.
India, which annually earns Rs 2,200 crore from foreign tourist arrivals, attracts nearly one million overseas visitors a month, a number which could see a drastic fall next month due to travel restrictions.
Indian Association of Tour Operators (IATO) and Assocham saw job losses in the sectors as companies try to tide over the situation by cutting non-essential workforces and stopping recruitment. They wanted the government to review the decision to suspend visas for a month and allow inbound travel through limited gateway cities.
“The ban on travel to India for a period of one month will have a cascading economic impact and will lead to job losses in the entire hotel, aviation and travel sector. We estimate that it will lead to direct loss of not less than Rs 8,500 crore,” IATO Secretary Rajesh Mudgill said Thursday.
Assocham Tourism and Hospitality Council chairman Subhash Goyal said since the outbreak of coronavirus, the aviation and tourism industries in India have been adversely affected.
“However, we were able to manage our expenses and keep the staff because some amount of essential travel was going on. The suspension of visas Wednesday night has come as an immediate blow to the entire tourism, aviation and hospitality industry,” informed Goyal.
“If no visas are valid, within the next 10 days the travel and tourism industry will come to a virtual stop. It would mean that everyone will cut down costs and terminate non-essential staff and stop recruiting additional staff,” added Goyal.
Expressing similar views, Mudgill said, “In view of the staggering loss that the entire industry stares at, we request the government to consider a review of the situation after 10 days and also consider giving relief in taxation to the sector as it will help in mitigating the losses suffered.”
Federation of Hotel & Restaurant Associations of India (FHRAI) vice-president Gurbaxish Singh Kohli said business has been very slow since November.
“When coronavirus made news, hotel room cancellations began and crossed the 80 per cent mark. New bookings are almost completely on hold, including the NRI segment which accounts for 60 per cent of the tourism revenues mostly in the months from April to September,” Kohli said.
According CII, this is one of the worst crises ever to hit the Indian tourism industry impacting all its geographical segments – inbound, outbound and domestic, almost all tourism verticals – leisure, adventure, heritage, MICE, cruise, corporate and niche segments.
CII Tourism Committee said to save on variable costs and minimize fixed costs many small and mid-sized hotels, resorts and car rental companies are shutting down operations and asking staff to go on leave without pay.
Moreover, the working capital of many corporates in the tourism sector is seriously hit by almost 60 per cent and for micro, small and medium tourism enterprises by almost 80 per cent, it added.
PTI