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COVID-19 hits Indian Travel, Tourism and Hospitality Industry

With COVID-19 spreading pan India, travel, tourism and hospitality industry is set to witness a massive unemployment in the sector. According to FAITH, “As a result of this pandemic, Indian Tourism industry is looking at pan India bankruptcies, closure of businesses and mass unemployment. It is believed that around 70 per cent out of a total estimated workforce of 5.5 crores (direct and indirect) could get unemployed (~ 3.8 crores).  This effect of job losses and layoffs has already begun throughout the country.”

As per the latest report by WTTC the global travel could be adversely impacted by up to 25 per cent in 2020. This is the equivalent to a loss of three months of global travel. This could lead to a corresponding reduction in jobs of between 12 and 14 per cent.

Commenting on the situation, Rajeev Kohli, Joint MD, Creative Travel and President of Euromic, said, “The situation emerging out of the COVID-19 is quite grave on the health of the Indian travel fraternity. Business has come to a zero. I respect and agree with the move taken by the Government on stopping the visas. But I do believe that government needs to come out with a rescue plan for the Indian travel trade by providing working capital with no interest, moratorium on all loans for the next six months.  he govt needs to come with some measures otherwise Indian travel industry will collapse and they would end up with a lot of non-performing assets on the banking sector. We have lost 30-40 per cent of the inbound business for the year. If things do not turn around in the next 6-8 weeks, we will lose out another 30-40 per cent of the inbound business.”

Jyoti Mayal, President TAAI, said that there is a zero business. “90 per cent of the cancellations are coming from airlines. We are doing US$29 bn of forex earnings and we expect 50 per cent hi. IATA agents are booking Rs. 1300 cr in a month and if it continues for 3-4 months, it will be a huge loss for the industry. It will take time even after the situation gets normal for the revival. Cruise business is badly hit. China, South East Asia and Europe will take longer time to revive. This is a huge setback for the industry. We have sought a lot of exemption and relief from the government and waiting for a favorable support,” she added.

Subhash Goyal, Chairman, ASSOCHAM Tourism and Hospitality Council and Honorary Secretary of Federation of Association in Indian Tourism and Hospitality, says that the total tourism business in India is estimated at US$28 bn including Rs 2 lakh crore in domestic tourism activity. “We have lost about 15 lakh foreign tourists in the month of March and April and we are not sure of the future business. Tourism industry will go into big loss of Rs 15,000 crores of foreign exchange. This has cause lot of our members business going into big losses and some small companies are on the verge of closing their business as they are not in the position to meet the expenses and survive. Hence, we have requested Hon’ble Prime Minister, Finance Minister directly and through the Tourism Minister for a bail out package for the travel and tourism industry,” Goyal said.

The National Restaurant Association of India (NRAI) has urged the government to support the industry amidst the Coronavirus outbreak. NRAI has requested the government to relax certain rules and regulations in dire times when COVID-19 is fast spreading across the world. The onslaught of coronavirus has taken the world by storm and has brought the economy down on its knees. "Looking at the current scenario, what people are going through is much more serious and they need all the support. Though these are testing times for the Industry, it is secondary amidst the circumstances. However, we will definitely need the support from the government once everything is under control and we are ready to bounce back,” Arjun Raj Kher, Brand Head, Hitchki and Bayroute said. 

Aviation industry is also badly hit as all international flights have been cancelled and domestic flights are also being curtailed. According to CAPA (Centre for Asia Pacific Aviation India) "The new advisories and restrictions that are being announced every day, along with the Indian government urging people to avoid all non-essential travel, demand is expected to weaken substantially, with a drop of 40-50 per cent or quite possibly even higher being possible in the near-term, as is being seen in other markets."

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