The cascading effect of the coronavirus has been found to cripple the Indian tourism and hospitality industry at an astonishing pace, Indian Chamber of Commerce (ICC) said.
“Disruption due to coronavirus could result in 18-20 per cent erosion of nationwide occupancy across the hospitality sector, and 12-14 per cent drop in average daily rates (ADRs) for the entire 2020. The hospitality sector is also likely to be impacted by large-scale cancellations and drop in room rates,” Rajeev Singh, DG, ICC, said in a media release.
Most of the tourism companies afflicted by Coronavirus Pandemic are now anxiously looking for interim relief to pay EMIs, installments, taxes, and salaries to employees for at least six months, Singh said.
ICC also suggests six to nine months' moratorium on all principal and interest payments on loans and overdrafts, besides deferment of advance tax payments. ICC would like to recommend a complete GST holiday for tourism, travel and hospitality industry for the next 12 months till the time the recovery happens.
“We will also recommend for interest reduction or subvention on term loans and working capital loans for Travel and Tourism industry. ICC also strongly recommend for removal of fees for any upcoming licenses, permits renewal, excise exemption (for liquor mainly) for the hospitality and travel industry across the country,” ICC said.
ICC recommends set up of a “Travel & Tourism Stabilisation Fund” with direct benefit transfer to each unit to prevent financial loss and consequent job loss. “Each unit suffering loss should claim equivalent subsidy to the Ministry help break even and avoid sacking of a single employee. The claim of each loss making unit would be verified by a concerned officer of the State Government and once verified the amount needs to be transferred to the account of the unit owner, on the undertaking that no employee is sacked. This fund could be drawn from the Direct Tax Contribution of this sector, supplemented by the Central Government. If this is not taken, we fear, that the economy which was already facing highest unemployment at around 8%, could slip into recession with unemployment increasing further,” Singh said.