Tourism industry in shock after stimulus package abandons sector’s concerns

All leading industry associations representing the Indian tourism sector have expressed shock over the central government’s position of not addressing any of its concerns in the economic stimulus package, though the sector is in a standstill ravaged by the epidemic.

Key industry body, the Federation of Associations in Indian Tourism and Hospitality (FAITH), said the Indian tourism industry is deeply taken aback by the fact that none of its concerns have been addressed by the government in its economic stimulus package.

“Indian tourism industry has gone into a state of disbelief and shock. It was looking forward to a deep set of survival measures for tourism, through the Rs 20 lakh crore package, but our concerns were not addressed,” said Nakul Anand, FAITH chairman on Sunday, in a letter addressed to the Minister of Tourism Prahlad Singh Patel.

The Indian tourism, travel and hospitality industry is believed to impact almost 10% of GDP and it has already seen over a quarter of accumulated losses that began from February onwards, the statement said.

There is no cash inflow expected for many quarters in 2020-21 as the key segments of the Indian tourism economy will be down, the statement said. FAITH has earlier said that the coronavirus impact could render 3.8 crore people jobless, which is around 70% of the total workforce in the tourism and hospitality sector.

“The international inbound tourists, inbound and VFR — (visiting friends and relatives) and the outbound travel will remain mostly non-performing due to international flight restrictions and tragic impact in most key markets tourism markets of India,” it added.

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 and children, the new social distancing norms, corporate travel freeze and the closure of the holiday season which will impacting all leisure, adventure, heritage, spiritual, cruise and niche tourism segments, the statement said.

“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 tourism businesses unviable on a cash operating basis,” the statement said.

To prevent this and to ensure survival of the sector, the Federation had proposed a dedicated interest- and collateral-free long-term fund for paying salaries and operating costs, and for a minimum of 12 months of complete waiver of fixed central and state statutory and banking liabilities without any penal or compounding interest. “These have not been addressed,” Nakul Anand stated.

“With no visibility of cash inflows the Indian tourism industry is now looking at large scale bankruptcies, business closures which will lead to job losses across cities, towns and hinterlands of India,” FAITH said. This has the potential to set back the Indian tourism, travel and hospitality industry by many years, it added.

While agreeing with the points made by FAITH, the Federation of Hotel and Restaurant Associations of India (FHRAI) Vice-President Gurbaxish Singh Kohli said, “We are in a state of shock because of the insensitivity shown by the government. As always, the hospitality industry has been completely ignored. It’s almost as if our existence or imminent doom does not matter at all.”

The hospitality industry pledges its hotel rooms to the government for accommodating the quarantined, it prepares and distributes lakhs of free meals to lakhs of people and supports the government whenever called but unfortunately it does not even figure in their list of sectors that are in desperate need of help, he added.

The FHRAI calls for the government to pay immediate attention to hospitality and tourism which contributes almost 10 per cent to the GDP, Singh said.

The National Restaurant Association of India (NRAI) also said in a statement that the industry needs support so that it gets a chance to fight and not die a silent death.

“We are very sad and extremely disappointed that the Finance Minister chose to completely ignore this sector in these five days of announcements of stimulus package,” NRAI President Anurag Katriar said.

Now, the industry is staring at large-scale close-down of businesses and massive loss of employment in the sector, he added.

“Let me also reiterate that our primary demands were largely around policy and liquidity support and did not require massive financial outlay from the government,” Katriar said.

NRAI once again requests the government “to examine our requests closely and consider them favourably”, he added.