COVID-19 has enforced not only national lockdowns but also shut down international borders, flights and shipping services. This has severely impacted livelihoods across various industries, especially the tourism sector.
Hotels have been forced to cancel bookings, travel agencies are shutting down and uncertainty looms large over the revival of the tourism industry which thrives on the aviation sector.
Subhash Goyal Chairman, STIC Travel Group, ASSOCHAM Tourism Council, and Home Secretary FAITH said: “For something to revive it has to survive. I don’t think the tourism sector will survive.”
“There is going to be a loss of 38 million direct jobs and the number could also reach 50 million if we include restaurants, transport, guides, etc,” he added.
The World Travel and Tourism Council estimated that tourism contributed USD 240 billion or 9.2 % of India’s GDP. The sector also employed 42 million people directly and indirectly, as of 2018.
Also, medical tourism is expected to grow at USD 7-8 billion in 2020 separately.
COVID-19 has wiped out the tourism earnings of India. India may lose close to 1.25 trillion rupees in 2020, as per data from an industrial body.
What can be done to revive this sector?
Crises situations allow the policymakers and stakeholders to rise from the disaster and provide long-lasting solutions to the various issues that affect the economy.
Subhash Goyal suggested some revival options like one year tax holiday for the sector, one-year tax refund, immediate return of Income Tax Refund and advances, 10 year Soft Loan to tourism, 50% salary should be paid by the government to staff in the Tourism Industry amongst others.
“All statutory payments and bank Interest and EMI should be deferred by nine months and there should be no interest in the deferred period” he added.
India can develop a two-tier solution to overcome the problem.
The sector is expected to suffer for another 3-4 months after the lockdown is lifted, till then, only essential travel will be allowed. Sometime during November, the demand may pick up.
India may not see any international tourist arrival for at least another 8-12 months. During this period, various tourism agencies and government can tap into the potential offered by Tier 2 and 3 cities.
Normally, tourism is often attracted through advertisements in urban areas. The time has come that the sector now taps into ‘small-town India’ to stimulate the sector.
Digital marketing can play an important key role here.
However, how one travels post-COVID-19 will transform as cleanliness, social distancing, hygiene checkups will dominate the travel and tourism sector.
Hence, sanitation and affordability can go a long way in encouraging people to travel after the sector limps back to normalcy.