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Inbound travel may see negligible business until September: Industry experts

As per IATO estimates, the hotel, aviation and travel sectors together may incur losses of about Rs 8,500 crore.

April 06, 2020 / 06:59 PM IST

The COVID-19 pandemic that has caused a nationwide lockdown is expected to deal a mighty blow to the travel and tourism industry, like many other industries.

Indian Association of Tour Operators (IATO) estimates the hotel, aviation and travel sector together may incur a loss of about Rs 8,500 crore due to travel restrictions imposed on foreign tourists.

"Tourism and travel industry will take the longest to revive. Cash flow is nearly dead. Around 6-7 crore jobs are either directly or indirectly dependent on the tourism industry. Without cash flow, it will be difficult for the industry to pay salaries and license dues to states," said Jyotsna Suri, CMD, Lalit Suri Hospitality Group.

Dipak Deva, MD, Sita TCI and Distant Frontiers, said that inbound tourism is likely to see no business until September 2020. "There may be a revival in October. However, business is likely to resume only in January next year," Deva said.

Speaking at FICCI's online stakeholders' meet for the travel and tourism industry, Suri suggested a longer moratorium of one year on loans to the industry citing high interest and principal payments. She also sought a waiver on state license fees until business revives.


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Stakeholders raised concerns over the impact on small tour operators.  The travel and tourism industry comprises 70 percent workforce in MSMEs. In the absence of adequate cash flow, there is a need for a bailout package to help small tour operators.

The real struggle will be the lack of fresh capital and fresh loans since SMEs in this industry lack collateral.

According to a recent KPMG report, the travel and tourism industry is looking at an estimated job loss of 30 million in India. The World Travel and Tourism Council estimates a reduction of 30 percent business in the coming year.

Rupinder Brar, Additional Director General, Ministry of Tourism suggested that the industry needs to tap domestic tourism.

"In tight situations of cash flow, people may not invest in discretionary spending and we may see a decline in inbound business. For all sectors to revive, there is a need to tap the strength of the domestic market," said Brar.

Other suggestions from the industry included a waiver of GST, an introduction of a visa-free regime and the waiver of landing fee until April 2021.
Pramiti Lonkar
first published: Apr 6, 2020 06:57 pm

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