With each passing day, the impact is coming out loud and clear for all the major economies that are hit hard by the blow of coronavirus. Travel and tourism not only involve leisure and holiday but binds the entire world for business, educational, medical and many other purposes that we may call as essential and unavoidable. The tourism industry currently accounts for 10 pc of global GDP and by now, it is crystal clear that the travel and tourism sector is facing the most disastrous phase ever.

The World Travel and Tourism Council (WTTC) has already warned that the COVID-19 pandemic could cut 50 million jobs worldwide in the travel and tourism industry and Asia is expected to be the worst affected continent. Within the travel and tourism industry, airlines and cruise ships are suffering bigger losses than the hospitality sector.

Once the outbreak is over, it could take up to 10 months for the industry to recover. Of the 50 million jobs that could be lost worldwide, around 30 million would be in Asia only, seven million in Europe, five million in the Americas and the rest in other continents, according to WTTC.

According to reports, the equivalent to a loss of three months of global travel in 2020 could lead to a corresponding reduction in jobs between 12 pc and 14 pc.

This impact would depend on how long the pandemic will last and could still be aggravated by all the restrictive measures, travel advisories, airline lockdown and revoking of the issued visas.

“Certain measures are not helping and they can prompt the economic impact to be way more significant,” WTTC’s managing director Virginia Messina told an international news agency, referring to the U.S. administration’s decision of travel advisory to Europe. Messina also said that such policies are too generic and not proven to be effective to contain the virus as these restrictions could complicate travel for medical experts and delivery of medical supplies.

The global travel industry is already crying out to governments to remove or simplify visas wherever possible, cut travel taxes and introduce incentives once the epidemic is under control. From big to medium to small, all travel agents and tour operators are trying to influence or manipulate their customers to postpone and reschedule, and not cancel their travel plans.

COVID-19 & Indian tourism industry

Over the last few years, India has emerged as a global front runner as far as travel and tourism is concerned by virtue of its sheer size of the travelling population. The global tourism industry considers India as a mighty player more in the outbound sector, though its inbound and domestic sectors leave tremendous opportunities left to be explored.

In a letter addressed to the prime minister of India, the Federation of Associations in Indian Tourism and Hospitality (FAITH), the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India has placed their unified agenda to stimulate the Indian travel and tourism sector.

As a result of coronavirus pandemic, the Indian tourism industry is looking at pan India bankruptcies, closure of businesses and mass unemployment. FAITH member associations estimate that around 70 pc out of a total estimated workforce of 55 million (direct and indirect) could get unemployed (38 million).  The association is alarmed that this effect of job losses and layoffs has already begun throughout the country.

FAITH also estimates that about USD28 billion+ in forex and upwards of USD30.76 billion in domestic tourism activity will be at economic risk throughout the year. Thus, in excess of USD50 billion of direct tourism industry and almost double of that in total economic activity is at risk.

“As a result of this pandemic, the tourism industry in India has reached dire straits today and is staring at mass unemployment and bankruptcies…With declining revenues, almost all tourism businesses are running out of working capital. However, with the responsibility of staff and payment of their salaries, EMIs to service, advance tax, PF, ESIC, GST, excise and other state levies, bank guarantees, security deposits, this industry needs your (government) support now more than ever,” the letter signed by Nakul Anand, chairman of FAITH and countersigned by all other leading members stated.

FAITH has urged for a twelve months moratorium on the EMIs of principle and interest payments on loans and working capital from financial institutions (both banking & non-banking). Additionally, the apex body has requested for doubling of the working capital limits and on interest-free & collateral-free terms so that it prevents all tourism businesses from going bankrupt.

Additionally, to prevent insolvency, FAITH has requested for a deferment for 12 months of all statutory dues whether GST, advance tax payments, PF, ESIC, customs duties at the central government level or at any state government level the excise fees, levies, taxes, power & water charges, bank guarantees & security deposits and deferment of all renewals, across the tourism, travel, hospitality & aviation industry.

The letter also says, “We request you to set up a support fund for 12 months on the lines of MNREGA to support basic salaries with ‘direct transfer’ to affected tourism employees.

The TCS (tax collected at source) on travel has been proposed in Finance Bill 2020 to be levied from April 1, 2020 which FAITH has strongly requested to not introduce as it will displace business from India to overseas, practically shutting down the businesses of most Indian tourism companies.

Insurance also came as a matter of concern. It was requested that a deferment of increase in any insurance premium for a period of 12 months such as for example for standard fire and special perils rate for fire, loss or profits be announced.

On GST, a complete GST Tax Holiday for the tourism, travel & hospitality industry for a period of 12 months has been pleaded as with almost nil revenues there is hardly going to be any GST collection.

A grant of 200 pc weighted exemption for 12 months on expenses to Indian corporate companies to hold exhibitions, conferences and incentive trips in India could revitalise the industry, FAITH suggested.

Last but not the least, finally the industry body has asked the government to set up a national tourism task force of all the government departments at central and state levels as well as industry stakeholders to meet regularly to fast track all tourism investment approvals.