The failure to offer a stimulus package will leave the hospitality and travel industries bereft and rudderless
In the Rs 20 lakh crore that the Indian government has announced as a stimulus to kick-start the economy, there is nothing at all for the hospitality and travel industries that employ millions of people, many of whom are on the verge of losing jobs.
The coronavirus pandemic will have a devastating and wide-reaching impact on the hospitality and travel industries. By any estimate, between the two, there will be a loss of over 4 crore jobs and over Rs 10 lakh crore in market capitalization.
The World Travel & Tourism Council (WTTC) expects the crisis to cost the tourism sector at least US$22 billion, with the travel sector anticipated to shrink by up to 25 per cent in 2020, resulting in a loss of 50 million jobs. Closer home, the travel and tourism contributes to around 8.1% to India’s employment, or 42.7 million jobs. As per KPMG assessment, about 10 to 15% of these jobs are expected to shrink.
And yet tragically, in the Rs 20 lakh crore that the Indian government has announced as stimulus to kick-start the economy, there is nothing at all for the hospitality and travel industries that employ millions of people, many of whom are on the verge of losing jobs.
At Hotelier India, we had reported how industry bodies had lobbied with the government to offer incentives for revival. HAI had requested for a 5-point relief measure, which included the deferment of all statutory liabilities, including EMIs, to a minimum of 12 months at the centre, state and municipal levels, and subsidised employment for three months, with the government contributing 50% of the salary per employee. FAITH had requested for the doubling of working capital limit, made available on interest-free and collateral-free terms and a deferment for 12 months of all statutory dues.
Unfortunately, the Indian government has given the requests a go-by. The Indian travel industry, which the Indian Association of Tour Operators estimates is a Rs 18 lakh crore business, has almost collapsed. FAITH released a statement saying they expected “deep survival measures” in the stimulus package, but the government offered none. Its statement talked about accumulated losses, which began in February.
The two industries, which contribute almost 10% to India’s GDP, are right in feeling abandoned by the Indian government, left bereft and rudderless as they are. They need government intervention to recoup and re-invent for a post-COVID world.
The challenges are many. International travel is not likely to open up anytime soon. While domestic leisure and work travel within the country may slightly ease up post the lockdown, many will be reluctant to travel. It will be months before hotels report healthy occupancy rates. Also, the opening will not be easy, given the stringent safety, hygiene and social distancing norms which will have to be implemented, and may require some investment.
The travel and hospitality industries need to now regroup and hew out solutions and carve out a new road ahead, without any help from the government.