India tourism sector’s frontline workers in deep financial crisis

Travelling during corona virus epidemic. Passport and protective face mask respirator. Coronavirus and travel concept. (Source: ShutterStock)

When Prince Charles visited Kochi in November 2013, tour guide Rajesh P.R. accompanied him. Rajesh is regarded as one of the best tour guides in India. He speaks many languages and has a nuanced understanding of various cultures.

Rajesh used to earn Rs 1 lakh a month during the peak season. However, he hasn’t made even a rupee during the past 15 months, ever since the COVID-19 outbreak. He says the future looks bleak.

“While we have not heard of suicides yet, I’m afraid we are not far away from such unfortunate news in the sector. Tour guides, agents and taxi drivers are in abject poverty due to the pandemic,” he said. “Some of them have Covid but can’t afford proper treatment as they are in a deep financial crisis.”

India’s travel and tourism sector contributed $121.9 billion, or 4.7 percent of the economy, in 2020, shrinking from $191.3 billion, or 6.9 percent of GDP, in 2019, according to data on the website of the World Travel & Tourism Council.

Jobs in the sector dropped 20.8 percent to 37.1 million last year from over 40 million in 2019, the Council data showed.

According to officials and executives, the prospects for travel and tourism workers don’t look bright as the country continues to report more than 60,000 fresh COVID-19 cases and upwards of 2,500 deaths daily.

KJ Alphons, who was minister of state for tourism during the Narendra Modi government’s first term, said millions of people directly and indirectly employed in the sector have lost their jobs.

“Most of them are deep in debt,” the former minister told Moneycontrol.com.

Tourist guides and ticketing agents as well as big hotel chains have been severely impacted.

“Big ticket players who have interests beyond the hospitality sector like ITC and the Tatas will survive. But others will struggle,” Alphons said.

The Hyatt Regency, one of Mumbai’s best equipped 5-star hotels, said June 7 it was shutting until further notice after a funds crunch made it difficult to sustain operations.

The Indian hospitality sector’s revenue per available room declined 39 percent in the first quarter of 2021. According to a report by global real estate service firm JLL, revenue per available room in the top six Indian cities had fallen by almost 50% in the first quarter on a year-on-year basis after the pandemic impacted air travel.

Global tourist arrivals fell 74% in 2020 from levels in 2019, according to the United Nations World Tourism Organization. The situation is not likely to improve this year.

Tourism accounts for 10 percent of global GDP. Spain, the Bahamas, Greece and Italy, which rely heavily on tourism, have been severely affected. Since the business of tourism is largely interconnected globally, it is important for the situation to improve across continents. But with India being one of the hardest-hit countries by the second wave, it may take longer for the sector to get back in shape here.

The World Travel & Tourism Council launched a campaign on June 7, urging governments around the world to restart international travel. Through the campaign titled Reunite, the tourism body is also calling on travellers to share the positive impact of travel. However, with the coronavirus still raging, many countries are keeping their borders closed.

“International tourism is almost dead as of now. I really feel for the employees in the sector,” said Alphons.

Some tourism workers like guides and taxi drivers have moved on to other jobs. While a few become insurance agents, some have joined call centres and others have opened fruit and vegetable shops. Many taxi drivers have sold their cabs because they were unable to repay loans.

“The sector is bound to suffer from talent shortage. We are unlikely to see youngsters coming into the travel and tourism sector in large numbers,” said Prasad Manjali, founder of Citrine Hospitality, a Thiruvananthapuram-based resort operator. “Already, we are seeing senior managers in hotels not getting recalled after being furloughed last year. Hospitality institutes and training centres may see less interest from students.”

There are 3,500 tour guides registered with the government of India, a figure that swells to 10,000 if unauthorised guides are included. What makes the plight of authorised tour guides worse, according to Rajesh, is that they are duty-bound not to work in other sectors, as per the agreement signed with the Central government.

“Many of us are mentally affected and may soon go into depression. In many families, kids have stopped going to school,” said Rajesh, who has developed health complications post-COVID-19. “The crisis is deepening and the authorities have to direct some help our way very soon. We won’t get any bank loans also due to our financial plight.”

An official with a bank said on condition of anonymity that only people with healthy financials will be given business loans. It’s very difficult to secure a loan if one belongs to the hospitality or tourism sector today, he said. As a result, many small entrepreneurs in the sector have either pledged or sold their family gold or have put up their property for sale.

The finance ministry said on March 31 that the scope of the Emergency Credit Line Guarantee Scheme has been expanded to cover business enterprises in the hospitality, travel & tourism, leisure and sporting sectors.

This is the first part of a two-part series.