Ritika Karan
The outbreak of the Coronavirus Disease 2019 (COVID-19), has brought an out of the ordinary amount of uncertainty into economies worldwide. Across the world, the countries are confronting growing health threats, wide-ranging social-distancing norms have also been put into practice, while corporate society as well as the governments are converging to support the indigent and providing financial relief packages to stabilize economic conditions. Up till now, in the majority of the countries, tourism has been considered as a benefactor to economic growth and it has been universally accepted that after every consecutive year, a massive investment continues to pour in it’s development throughout the world. A large number of jobs in the global tourism industry could astray due to the COVID-19 outbreak, which is influencing travel like no other event in history and has caused around 96% of all worldwide destinations to implement restrictions in response to the pandemic.
The Secretary General of World Trade Organization (UNWTO) exclaimed that, “With tourism activities suspended, the benefits brought by the sector are under threat which means that millions of jobs could be lost, and the progress made in the fields of equality and sustainable economic growth could be rolled back. As per the analysis, as of April 6, almost 96% of all the worldwide destinations have introduced travel restrictions in response to the Coronavirus outbreak. Approximately, ninety destinations have been mentioned to completely or partially close their borders to tourists, whereas forty-four destinations are closed to certain tourists depending on country of origin.”
The studies show that the destinations have already adjusted their confined measures that are complete or partial closure of borders to tourists, destination-specific travel restrictions, total or partial suspension of flights and different measures, including requirements for quarantine or self-isolation, medical certificates, invalidation or suspension of visa issuances.
The World Travel and Tourism Council has alerted that the COVID-19 pandemic could cut almost 50 million jobs worldwide in the travel and tourism sector. Asia is expected to be most affected. As soon as the situation gets normal, it could take up to a minimum of 10 months for the industry to recapture. Currently, the travel and tourism sector accounts for 10% of global GDP. World Travel and Tourism Council has said that the coronavirus outbreak has put up to 50 million jobs in the global travel and tourism industry at risk, with travel likely to collapse by a quarter this year, Asia being the most affected continent.This impact would depend on how long the epidemic lasts and could still be aggravated by some recent restrictive measures. There are certain measures that may induce the economic impact to be way more significant. WTTC has exclaimed that equivalent to a loss of three months of global travel in 2020 could lead to a corresponding reduction in jobs of between 12% and 14%, also calling on governments to remove or simplify visas wherever possible, slash travel taxes and introduce incentives once the epidemic is under control.There is a need of flexibility in the travel and tourism sector, so that the travelers can postpone and not cancel their plans.It has also be found that airlines and cruise ships are currently being more impacted as compared to the hotels and hospitality sector. It has been predicted that the Indian tourism industry is projected to book Rs 1.25 trillion as revenue loss in calendar 2020 as a fall out of the shutdown of hotels and deferment in flight operations after the onset and spread of the Coronavirus (Covid-19) pandemic. The study mentions that the impact of the pandemic on tourism was at about 50 percent during the months of January and February 2020, while it was higher at 70 per cent in March, followed by the suspension of international flights.
The Indian tourism industry is expected to book a revenue loss of Rs 69,400 crore, indicating a year-on-year loss of 30 per cent. The most perceptible and immediate impact of Covid-19 is seen in the hotel and tourism sector in all its geographical segments – inbound, outbound and domestic and all the verticals – leisure, business, exploration, adventure, heritage, MICE (Meetings, Incentives, Conferences & Exhibitions), cruise and corporate. Due to the Coronavirus outbreak, there are few travel restrictions imposed by the Indian government as well as governments across the globe, forward bookings for various conferences and leisure travel bookings to foreign destinations have already been cancelled. In India, most of the summer holiday bookings have also been cancelled, thereby impacting domestic tourism.
The impact on the inbound and outbound passengers is anticipated to be at its peak in the next couple of quarters. India’s total foreign tourist arrivals (FTA) have been found to be at 10.9 million and the foreign exchange earnings (FEE) were Rs 210,971 crore during 2019, with Maharashtra, Tamil Nadu, Uttar Pradesh and Delhi accounting for about 60 percent of foreign tourist arrivals (FTAs). Nevertheless, with travel restrictions in India for over 80 countries and most of the flights of major airlines being deferred, along with the lockdown till May 31, 2020 the Indian domestic as well as foreign travel and tourism industry is expected to witness a sharp downfall in 2020. According to an analysis, the hotels need to revisit their capital-expenditure plans as the Covid-19 impact is expected to derail future growth. It has also been noted that while certain demand is anticipated to be impacted on account of the ongoing Covid-19 concerns, India is also expected to benefit from it as demand for MICE (Meetings, Incentives, Conferences & Exhibitions) from other Asian countries is expected to be channeled towards India to some extent, benefits of which will be seen only be seen post Financial Year 21. On the back of marginally positive sentiments for domestic tourism and MICE, led by social and industrial activities, we expect the momentum to pick up going forward and the industry to register a growth of about 3-5 per cent in revenues for Financial Year 20 – Financial Year 21.
(The author is MSc Economics Student SMVDV)
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