The state government should extend licenses for another six months without the entrepreneur having to make any payment, including bar licenses which are due for renewal shortly. In an exclusive interview, industry veteran Jose Dominic of CGH Earth Group, says a moratorium needs to be declared in this crisis situation to help the sector. If you don’t give a moratorium for loans then all of the tourism industry will become bankrupt, he says. Excerpts:
Q: Corona virus has impacted Kerala’s tourism fortunes to a very large extent. Can we attach a value to the loss incurred to Kerala tourism due to the pandemic, both from the hospitality sector and tour operator stand point?
A: The COVID-19 pandemic has impacted not only us but also the entire world. In fact, Kerala was one of the early actors in this case taking proactive steps to fight the disease. The tourism and hospitality industry has turned out to be the first victim of this virus as far economy and industry are concerned. Since the impact is on the entire economy, it has the power to obliterate the sector totally.
Q: What kind of lasting impact can this have on the tourism sector? Where all do you think the sector has been hit the hardest?
A: I have picked up some figures from Kerala tourism itself. The 2019-20 was perhaps a leap year for us. There was a 24% growth after the previous floods and Nipah virus onslaught. Our revenue was something like Rs 45,000 crore. There was a great surge in travel. But now all that has come to a complete stop.
Q: The hospitality sector has seen plenty of booking cancellations in the past few weeks. What kind of impact has this created for hoteliers?
A: The hospitality, tourism and aviation industries have been badly hit and seen maximum cancellations. Most of the airlines have cancelled their schedules and all airports have put severe restrictions. Just like the hospitality industry, aviation and other industries also should be helped to overcome their fixed cost liability.
Banks should help the industries keep afloat where there is such a crisis situation. This is a situation that humanity has never seen before.
Q: The operators have been asked to restrict the movement of the tourist groups. Have you tried to assess the impact of the crisis on the tour operators?
A: Tour operators, hoteliers, guides and everyone associated with the industry is in crisis. The impact on tour operators is huge as all states are in a lockdown mode.
Q: It’s now clear that the damages caused are widespread. How do you think we can tide over this crisis?
A: Let’s look at Kochi. It’s called a mega city but have a look at the waste disposal system. Sewage and waste disposal management should be our top priority. We should keep our environment clean. Development should come only after taking care of environment. There must a proper social infrastructure for the health of the citizen. Health and education are most important and only then we can build our future. Kerala tourism’s success is built on the state’s heavy investments into social infrastructure.
Q: What steps can the state government and tourism authorities take to help the sector come back to its original self?
A: In 2018, Kerala suffered due to the huge floods. The mission had three stages then. Stage one was rescue, stage two was rehabilitation and the third stage involved rebuilding. Similarly with this virus, people have been rescued and stopped to arrest spread of the disease. Now we are in the containment stage. Commerce, travel and tourism have come to a standstill. The impact on economy has been huge, and there is great dependence on tourism for daily livelihood. We could face a big job crisis.
The Kerala government has concurrently done a brilliant job trying to prevent spread of disease and rehabilitating people. We need a moratorium from banks to repay loans and interests during the crisis period.
Now for example, March 31 is when the bar license has to be retained. Who can renew now? There is no point. The government should say that licenses will be extended for another six months without any payment. From where will establishments pay tax as there is hardly any turnover? There should be a moratorium declared in this extreme crisis situation. If you don’t give a moratorium for loans then all of the industry will be declared as NPA and become bankrupt.
Q: What can the authorities do to ensure that there are not too many job losses in the tourism sector on account of this crisis?
A: Who knows? No one can predict positively whether it will be over by June or September. Right now, we should support the health ministry and the government in helping them to prevent spread of this disease.
Only issue is that of the employees. Airlines, hospitality and tourism sector have to ensure they pay wages to employees. Government has to help the sector with relief funds, so that people who lose jobs can be taken care of.
Q: What have been some of the key lessons learnt from this episode? And how can we be better prepared in future?
A: Our spending on health sector has to go up. Kerala has always placed a great deal of importance on health. But somewhere along the way, the accent shifted to building super-speciality hospitals. We have to ensure people get access to healthcare across the spectrum.
The other aspect is that we have to keep our environment clean. Tourism’s growth in Kerala was because of the green and clean environment. People are better educated and there is hardly any poverty. Our growth strategy should be responsible tourism, offering guests a great place to visit and live in.
