Tourism Breaking News
Federation of Associations in Indian Tourism and Hospitality (FAITH) has been sharing a regular updates with the Ministry of Tourism(MOT) and Prime Minister’s Office (PMO) on the impact of COVID-19 on the industry and apprise the Government on the effect of the outbreak has been till now. The update letter reads, “This is one of the worst crisis ever to hit the Indian tourism industry impacting all its geographical segments – inbound, outbound & domestic, almost all tourism verticals— leisure, adventure, heritage, mice, cruise, corporate & niche segments. The whole tourism value chain across hotels, travel agents, tour operations, destinations, restaurant, family entertainment venues & air, land & sea transportation.”
– Inbound foreign tourism of $ 28 bn + in value terms accounts for on an average basis almost 60-65% between October to March. As the news of the virus started picking up from November, the percentage of cancellations started going up in this segment exponentially and is reaching a peak of almost 80% now in March in many Indian locations. The value at risk from this segment will be in multiples of tens of thousands of crores.
– The forward bookings for the inbound season of October 2020 – March 2021, which should have started picking are all muted. These are showing highly discouraging signs with cancellations of important global travel marts which are marketplaces for contracting for the next season.
– The value of NRI segment from developed markets whose major season for visit to their families and relatives is around 60% + during April to September. There are reports of large-scale forward cancellations from these and unless the progression of the virus stops the almost entire value for the remainder of 2020 season is at risk.
– The holiday season of Indians both for travelling within the country and outside is heavily in April to July season, October and the December holiday season. Almost 28 million plus Indians are estimated to have travelled outside in 2019 and there were almost 1.8 bn domestic tourist footfalls. The December holiday season of 2019 took an estimated hit of almost 40%- 50%, the holiday season of April to July 2020 is likely to take a humongous hit which could be as high as 80-100%, unless there is positive news of the progression of virus decreasing. There are advanced cancellations and highly reduced forward booking pipelines for the holiday season. Only corporates are flying and that too only on highly essential same day travel. Most of the MNCs are advising work from home stifling travel.
– Cruise tourism of all kinds has come to a complete standstill with no clearances.
– Unexpected no shows are happening and most groups, meetings, cerebrations have all been cancelled and even eating out in restaurants is coming under serious pressure.
– To save on variable costs and minimise fixed costs many small & mid-sized hotels, resorts and car rental companies are shutting down operations and asking staff to go on leave without pay.
– Most of the Indian tourism travel and hospitality companies are facing demands for full refunds and they are doing so out of their cash reserves even for which they have paid advance tax and gst.
– Working capital of most tourism corporates is seriously hit by almost 60% and for micro , small and medium tourism enterprises by almost 80%.
– Margins are almost nil or negligible in many cases
– If there ever was a time for the central & state Government & tourism industry to stand together, this is it. The employees, managers & entrepreneurs of Indian tourism travel and hospitality are bravely fighting for survival at the front line and need an umbrella cover of relief and support from the central & state Government.
– Complete GST holiday for tourism, travel & hospitality and state government levies in the interim which will at least stimulate some domestic travel as the season starts.
– Joint tourism crisis management task force headed by PMO & MOT of centre & state chief secretaries and central ministries for quick action and a 24-hour strategic helpline to a key decision-maker.
– Extension of banking payment EMI deadlines with no penal clauses.
– Reduction of bank interest rate by almost 200 basis points with immediate full transmission for working capital.
– Publicly visible twice a day sanitation of all roads, monuments, buildings across all cities & towns which will generate tremendous domestic confidence
– Advise to all municipalities to keep garbage points clean and all garbage carries hard covered.
– No levy of the proposed TCS on travel as proposed in finance bill 2020.
– Seeing is believing. Once the virus stops progressing and as the domestic traveller will start returning upon seeing such confidence building measures, the global traveller too will be enthused seeing that. This will be the time for India to start its global tourism strategy zero based and target even those tourist source markets who were travelling to our competing nations. A major communications and advertising revival campaign for that time needs to be worked on now.
