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TOURISM INDUSTRY SLAMS STIMULUS PACKAGE

Indian Tourism and hospitality industry express shock and disappointment for its exclusion under Rs 20 lakh crore Atmanirbhar Bharat Abhiyan package; Industry associations say the government has failed to address their concerns.

Tourism is a people-intensive business and the human impact is unprecedented in its survival and growth. Indian Tourism Industry is one of the fastest-growing sectors, contributing 10% of the country’s GDP and employs 43 million people – which is 8% of all jobs in the country. On account of COVID-19, statistics show that in the hospitality sector in India there could be a potential loss of 5-7 million jobs. Indian Travel and Tourism industry which sized the US $247 billion as per the 2018- 19 data could see a short-term fall.

The lockdown hardly hit the most in terms of air borders being sealed by India and no foreign or domestic travel is permitted by air, rail, road, and waterways. The Travel tourism hospitality and aviation Industry had survived on it and seek assistance from the government for the new start.

The various travel and hospitality industry associations in India including FAITH, IATO, TAAI, IAAI, FHRAI and it’s leaders have expressed their shock and disappoints after the last and final tranche of relief and

Mr. Nakul Anand, Chairman , FAITH

reform package announcement of Finance Minister Ms Nirmala SItaraman in connection with Prime minister Mr Narendra Modi’s much-hyped Atmanirbhar Bharat Abhiyan package, despite the repeated requests from various trade bodies and the role of this sector and as a critical contributor to India’s GDP and foreign exchange earnings.

The entire tourism industry feels that government has totally ignored its pleas for assistance for the survival and existence of the travel, tourism, hospitality and aviation sectors due to the ill effects of lockdown and Cobvid 19 pandemic. Industry leaders pointed out that Ms Nirmala SItaraman failed to mention the role of travel and tourism sector and strongly believes that an unprecedented wave of layoffs could soon start in the industry in the absence of any immediate bailout and assistance.

FAITH, the Federation of Associations in Indian Tourism & Hospitality, the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI), which had raised several requests over the past few weeks to the prime minister, EG-6, finance, commerce and aviation ministries and was working in coordination with the tourism ministry said its 10 weeks of constant discussions have come to a nought and the industry was in a state of shock and disbelief.

According to Mr Nakul Anand, Chairman, FAITH, the Indian tourism industry has gone into a state of disbelief and shock after the final announcement of Atmanirbhar Bharat Abhiyan package. The Indian Tourism industry was looking forward to a deep set of survival measures for tourism from the ₹ 20 lakh crore package announced over 5 days, which however were not addressed.

Mr Pronab Sarkar, President, Indian Associations of Tour Operators (IATO) has also expressed his shock and disappointment. He added that IATO and its entire member’s community have been completely disappointed by the central government’s lack of empathy for the suffering of the travel and tourism sector in our country, despite

The Travel, Tourism and

11 Hospitality industry in India which contributes more than 10% of National Gross Domestic Products has come to a screeching halt due to lockdown since

March 2020 leading to massive loss of revenues, jobs as well as cash flows across online and offline travel operators and hospitality players across the country

Mr. Pronab Sarkar, President, IATO

the prime minister mentioning tourism in all his speeches. This sector, directly and indirectly, employs about 4 crores people yet there is not a single word of solace for the sector in the entire five press conferences held by Ms Nirmala Siataraman, Union Minister of Finance.

“The tourism industry has borne the maximum brunt of this pandemic and industry of the size of Rs.18 lakh crore is on the brink of collapse. The tourism industry was the first, which was affected even before the lockdown in the month of February, when international flights and visas got cancelled starting with China, followed by Italy, Iran, Korea and then followed by all the countries.

“The neighbouring countries are already ahead of us in these measures and as and when inbound tourism starts we shall go down further in the wish list of travellers. Lack of any mitigating announcement by the finance

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Ms. Jyoti Mayal, President, TAAI

minister in the series of announcements made only goes to show that the government considers the entire sector not worthy of any attention,” he added.

Ms Jyoti Mayal, President, Travel Agents Association of India said, “We are not only in despair but also in a state of shock. The trade was so confident that under the leadership of Modi ji, we would be nurtured and protected. The Honourable Prime Minister had directed not to retrench staff and to pay full salaries. We blindly followed his instructions in spite of our incomes being ZERO. There was an assurance of support to all citizens and all organisations during these times. This announcement has completely dejected our member travel agents and tour operators.

The feeling that the Govt has abandoned our sector which is one of the largest revenue earners in the country, be it Income Tax, GST, Foreign Exchange earning etc. Ours is a service sector and we promote travel and tourism across the world with a focus on India.

Capt. Swadesh Kumar, President, Adventure Tour Operators Association of India said “ The entire tourism industry stakeholders and its associations are in shock and numb and we do not know which direction we should move and what is next. ATOAI and our members were anxiously waiting for a major relief package from Finance Minister and some financial benefits to save our industry in the current situation, but to our total dismay, no such packages or announcements have come to support the ailing tourism and adventure travel segments in India.

“This adventure and activity-based tourism providers are scattered across the country, even in small towns like Wayanad in Kerala or Araku Valley in Andhra Pradesh, where peoMr. E.M Najeeb, Sr. VP, IATO & President, CKTI

Capt. Swadesh Kumar, President, ATOAI ple completely depend on adventure tourism activities for their livelihood. Another example is Leh and Ladakh in Kashmir Himalayan region, there are more than 5000 taxis and more than 3000 motorbikes which are presently vacant and waiting for the business to restart.

We are expecting a minimum of six months to restart the operations and business until the grass root level workers need support for their mere survival and existence. Now we are totally dejected and in an uncertain position to take any further step to move forward and restart our business.

According to Mr E.M Najeeb, Sr. Vice President, IATO and President, Confederation of Kerala Tourism Industry, Travel and tourism sector is the first affected sector due to COVID 19 travel restrictions and the most affected sector so far. And probably this sector will be the last revived sector from the Corona Virus’s ill effects and will take the most time to revive due to the

pandemic flare-up fear.

Federation of Hotel and Restaurant Association of India (FHRAI) has expressed their displeasure for completely excluding from any kind of relief for the sectors that contribute close to 10 per cent of the country’s GDP and called for the government to immediately action a stimulus package for avoiding unfathomable consequences of failing the industry.

According to Mr Gurbaxish Singh Kohli, President, Hotel and Restaurant Association of Western India (HRAWI) and Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI) , “The entire hospitality industry in India is in a state of shock and despair and feels totally dejected and thrashed by our won government

Mr. Gurbaxish Singh Kohli, President, Hotel and Restaurant Association of Western India

in a deep crisis situation like COVID 19 pandemic. We have never expected an insensitivity approach like this from Finance Minister and as always, the hospitality industry has been completely ignored by the authority.

Mr Aashish Gupta, CEO of FAITH said, “The direct and indirect economic contribution of the tourism industry in India which includes airlines, hotels and others is estimated at about 10% of India’s GDP. No cash flow is expected for many quarters over FY20-21 for key segments like international inbound and outbound travel. What will companies do? We are now looking at large scale bankruptcies and job losses across cities and towns”. There is no cash inflow expected for many quarters as the key segments

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Mr. Puneet Chhatwal, President, Hotel Association of India’s,

of the Indian tourism economy - the international inbound tourists, inbound and VFR - (visiting friends and relatives) and the outbound travel will remain mostly nonperforming due to international flight restrictions & tragic impact in most key markets tourism markets of India.

To prevent this and to ensure survival, FAITH had proposed a dedicated interest and collateral-free long term fund for paying salaries & operating costs and for minimum 12 months complete waiver of fixed central & state statutory and banking liabilities without any penal or compounding interest which have not been addressed.

Last month Mr Puneet Chhatwal, ( MD & CEO of Indian Hotel Company) and President, Hotel Association of India, wrote to Ms Nirmala Sitharaman, Finance Minister seeking a relief package. It pointed out that the country’s travel and hospitality industry is staring at a revenue loss of 5 trillion rupees ($66 billion) over the next year while 35-40 million jobs, both direct and indirect, are in jeopardy.

Mr Puneet Chhatwal, said, “India like many other countries has imposed a total shutdown of air traffic, both domestic and international. The lockdown is preventing movement of people till May end. Re-opening of air travel will have a phased approach. In India, we have a very strong domestic tourism market, over 87%, a key factor in the industry’s recovery.

TAAI has submitted a fresh memorandum to all the ministries and said that to prevent the trade from collapsing completely and it’s travel agent and tour operator members from winding up their business, which will result in mass unemployment, requested to consider their appeal on a war footing and ensure the same is considered in totality.

Through an appeal to Ministry of Civil Aviation by Tourism Industry bodies, the bare minimum requirements for immediate survival are Refunds of cancellations with waivers and ad

Indian tourism travel and hospitality are said to impact 10-12% of India’s employment which is believed to cover almost 5 crores + direct and indirect jobs. The industry has gone numb from a lack of any um- brella direction from the Government or without any fiscal & monetary support.

vances of travel agents & tour operators from all Airlines / IATA (especially National Carrier-Air India are not waiving of cancellation charges and are not refunding monies back to the agents/ customers.) Float account advance balance of Low-Cost airlines are not being returned to agents. Customers are demanding cash refunds and no credit vouchers as given by most airlines. The appeal to Ministry of Tourism & Ministry of Finance seeks Support Fund/contribution majorly for Salaries and establishment costs including electricity for next 6months minimum, minimum salary contribution by the Govt to the tune of 33.33%, Complete waiver of statutory liabilities for the next 12 months like GST, Instant Income Tax Holiday effective FY 2019- 20 for up to March 2021.

In the appeal to Ministry of Finance / Niti Aayog / RBI, Industry seeks Enhancement of Working Capital Limits/ Overdrafts at interest-free rates for at least 12 months without co-lateral, Immediate reduction in credit card charges by banks on merchant establishments on POS as well as web gateways to below 0.75%.

The proposed MSME fund with its many underlying reductions may have a very restrictive or limited usage.

Domestic travel and corporate travel within the country may slightly ease up post lockdown but will be highly restricted due to fear of travel among elders & children, social distancing norms, corporate travel freeze and the closure of the holiday season impacting all adventure, heritage, spiritual, cruise and niche tourism segments. The meetings incentives exhibitions & events segment will be severely impacted due to size restrictions. Consequently, all tourism Service providers, the hotels, travel agents, tour operators, tourist transporters, restaurants, guides will be compromised and the tourism industry of India will be operating with extreme under capacities making most businesses unviable on a cash operating basis.

Mr. Aashish Gupta, CEO of FAITH

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