The worldwide outbreak of COVID-19 has brought the world to a standstill, and worst hit is the economy. Tourism being the hardest hit of all major economic sector.
The corona virus arrival changed the way we live and travel. Once-busy airports with thousands of travelers arriving are now ghost places. With deserted hallways, empty parking lots and mostly blank screens showing arrivals and departures.
COVID-19 has placed the whole world on lock-down, with new research from the World Tourism Organization showing that 100% of global destinations continue to have restrictions on travel in places, and 72% have completely closed their borders.
According to the UNWTO Global tourism Dashboard there could be a loss of 830 million to 1.1 billion international tourists also loss of US$ 910 billion to US$ 1.2 trillion in export revenues from tourism and about 100 to 120 million jobs at risk.
In history whenever there has been any major impacts on the Economy of any country, tourism has always been the first one to get affected as people start to cut down on travel expenses first. However, tourism relatively had a direct role to play when it comes to COVID-19 which has widely spread most in countries with high number of tourists.
Since travel has become an important part of everyone’s life and is no longer considered as a luxury but a necessity to break away from a mundane routine and rejuvenate, the travel industry would soon revive. However, destination marketing services will see a drastic shift. The usually not so conventional destinations might see an upward trend in terms of tourists or as an alternate destination for some of the conventional ones for the time being.
Luxury travel will take its time to again play an important role in an individual’s life and domestic market and self-driven accommodations at boutique hotels and home-stays will be the focus till next summers as social distancing and staying at smaller properties reduce the risk of the virus. South East Asia and Middle East will play a key role in India Outbound tourism as they have close proximity and fewer Covid-19 cases.
Regarding MICE Travel, there will be a reduction in the travel budget and companies will keep on promoting Work from Home and conference calls/ meetings to reduce the risk and expenses.
Having said all that about the world scenario, let’s look into how travel and hospitality industry is and will be affected in India.
India is place full of culture and heritage. People from all over the world visit India to see the beautiful mountains of Himalayas in the north to Backwaters of Kerala in south and the dessert land of Rajasthan in west to Dense forests in north east. The impact of COVID-19 would be particularly catastrophic for the travel but for the effects to be known we must know the role it played previously.
In 2018, travel & tourism contributed 9.2% in India’s GDP and generated 26.7 million jobs in that year. This industry not only employs workers in cities but also provides an earning base for the rural population. The tourism sector accounts for 12.75% of employment in India, 5.56% of it is direct and 7.19% is indirect. Over 87 million people were employed in the travel sector in 2018-19 in India, according to the Ministry of Tourism annual report for 2019-20. It is estimated that in India, branded and organised hotels annual revenue is ₹38,000 crore. The restaurant industry in India, has an annual turnover of approx. ₹4 lakh crore. This industry provides direct employment to more than 7 million people.
India’s air transport industry employs over 400,000 people directly and 940,000 are employed in related supply chains.
On account of Coronavirus, the Indian tourism and hospitality industry is expecting a potential job loss of around 38 million. In the third week of March 2020 itself, the hotel sector saw a decline of more than 65% in occupancy levels as compared to the same period in 2019. Indian Association of Tour Operators estimates the hotel, aviation and travel sector together may suffer a loss of about ₹85 billion keeping in mind the travel restrictions imposed on foreign tourists. Impact of Covid-19 would be felt on both white- and blue-collar jobs. India’s outbound and inbound travel will witness an all-time low. The restaurant industry in India is expecting almost zero revenue in the immediate term, and a drop of 50% in the months to come. At least 30 per cent of hotel and hospitality industry revenue could be impacted if the situation doesn’t improve by the end of June 2020.There is a threat of job loss of nearly 15% in the hotel and restaurant industry once the lockdown is lifted, as they will not see an immediate surge in demand. Aviation industry in India could incur losses worth ₹ 27,000 crore in the first quarter of 2020-21. The passenger growth of airlines is likely to fall sharply to a negative 20-25% growth for the 2020-21.
For the recovery of the sector few things have been proposed by leaders in the industry.
Experts have emphasised on the need to focus on the potential of domestic tourism. ICC suggests setting up of a ‘Travel & Tourism Stabilisation Fund’ with direct benefit transfer. The experts also recommend cost optimisation at all operational levels.
It is estimated that, once the outbreak is under control, it would take up to 10 months for the tourism sector to return to its normal levels. Although COVID-19 is probably the worst threat T&T has ever faced, there is some room for optimism. International tourism is resilient and new alternatives such as the staycation tourist, and the digital and virtual tourist, will assuage the concerns of investors in the T&T industry and of governments around the world.
After a very long time of no international travel, people would be looking forward to explore once again is what we are sure of.