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Akshay Kumar

Akshay Kumar

The Ministry of Tourism held a Ministerial exchange ceremony last week to bid farewell to the outgoing Tourism Minister, Knesset Speaker Yariv Levin, and welcome his successor Minister MK Asaf Zamir. 

Minister Yariv Levin was appointed as Tourism Minister in 2015 and has made significant changes to the tourism landscape in Israel, which has yielded record breaking results.  During his tenure, Minister Levin has overseen a considerable increase to the inbound tourism industry thanks to innovative marketing and promotional campaigns, incentives to increase air connectivity from the world to Israel and by increasing overall marketing budgets. Ministry of Tourism has also invested in Israel’s tourism infrastructure including the Ramon International Airport, Dead Sea Promenade and allocated grants to encourage the establishment, expansion and conversion of hotels in various cities across the country.  The most prominent of all is the number of international tourists to arrive in Israel, which has increased from 3.1 million visitors in 2015 to 4.9 million in 2019, 58 per cent growth.

When addressing the gathering, former Tourism Minister Lavin said, “I say goodbye to the Ministry of Tourism today feeling great pain. Together we have made unprecedented breakthroughs through unimaginable investments, establishments of hotels, development of the digital field, and of course, the tremendous revolution we have made in the field of marketing that has brought Israel to a central place with unprecedented occupancy in hotels and hostels. I believe that the tourism industry is a sector with huge potential… there is no better way to understand a destination than through your own eyes, while experiencing the special and historical sites of Israel.”

Minister Zamir has taken on the role of Tourism Minister at an uneasy time for the tourism industry all over the world. “I dreamed of being the Minister of Tourism.  I will come to work to serve you and to get this industry back on track.  In spite of everything, I imagined and dreamed of, I am entering this industry in different times…  We need to rebuild the tourism industry, open the hotels as quickly as possible, the tourist attractions, and all the industries that supports tourism - restaurants, cafes and bars… as quickly as possible.  Encourage domestic tourism, open the sky and minimize damage so we can return to growth of the tourism industry.  When we conclude this important mission, we will fulfill tremendous potential of this country…  We have the ability to grow out of the crisis.” Minister Zamir said at the ceremony. 

Minister Zamir stated that he has asked Director General of Tourism, Amir Halevi, to remain in the office for the time being.  The Director General of the Ministry of Tourism, Amir Halevi, said, "I would like to say thank you to the outgoing Minister, Knesset Member Yariv Levin - for the leadership, professionalism, courage, wisdom and joint leadership through which we were able to bring the tourism industry to breakthroughs and record-breaking numbers of tourists each year. Incoming Tourism Minister Assaf Zamir, the first challenge you will face is to bring back the tourism traffic – in domestic tourism and certainly in inbound tourism... I wish for you to have significant years leading this office and that you will be able to make your mark in this industry… I am sure that together we will be able to withstand the great challenges we face".

Minister Zamir concluded his address by thanking his predecessor and encouraged the employees in the tourism industry.  “I would like to thank the outgoing Minister and all the office workers, with some of whom we have already met. There is an atmosphere in the office of genuine recruitment for the cause, genuine joy and I believe that there is no other way to overcome these times. Tourism is essential for the reconstruction and ignition of the Israeli economy."

The ceremony was attended by few key members while it was broadcasted live on YouTube via GPO.

Sharing similar culture, tradition, lifestyle and cuisine, India has always have had a strong relation with the Middle East countries. This relation has also been witnessed well at the tourism front. Over the last few years, majority of the Middle Eastern destinations have witnessed a significant growth in Indian arrivals resulting into India being one of the top three source markets for most of these destinations and these numbers will definitely rise northwards in the pre-covid era as the Govt data suggests that over 3.4 million Indians stays in UAE only.

Covid-19 pandemic has brought the entire globe to a standstill and tourism is no exception. In fact, tourism has been the worst hit, with little or no movement across the globe. As per the latest estimates, post the lockdown phase and after lifting of embargoes, outbound travel will remain silent for some period, and the timeline cannot be yet predicted due to unknown variables.

In the last decade, the appetite to travel for Indian travellers has increase multifold. With a huge millennial and youth population, the urge to travel post lockdown will be high for most of the Indian travellers. With long-haul and mid-haul travel under question, experts feel short-haul destinations can surely bounce back. Can Middle Eastern destinations harness this opportunity and tap the might of Indian outbound?  

Impact on tourism

Tourism is an integral part and one of the most important sectors for most of the Middle East’s economy. A huge percentage of the National GDPs have been contributed by the tourism and hospitality segment.

Speaking about the impact of COVID-19 on tourism, Khalid Jassim Al Midfa, Chairman, Sharjah Commerce & Tourism Development Authority, said, “The magnitude of the impact of the virus is on a scale we have never seen before, the tourism industry in all parts of the world has suffered immediate reverses and the long-term impact is clearly a factor that will have repercussions for an undetermined length of time. Due to the emirate of Sharjah’s close connections to the Indian market and intertwined interests, the impact of the virus and restrictions on travel between India and Sharjah is particularly noticeable.”

Most of the destinations witnessed a positive start to the year with the initial two months showcasing a growth, before the pandemic. Israel has witnessed a degrowth of 30 per cent in 2020 due to the persisting covid-19 obstacle.

Sammy Yahia, Director, Israel Ministry of Tourism – India and Philippines said, “This year had been a positive start for the Israel tourism industry.  Israel had already seen an overall increase of four per cent in tourist arrivals in the months of January and February credited to the Israel Ministry of Tourism’s global advertising campaigns.  However, with the onset of the COVID-19 epidemic, there has been a 30 per cent (approximately 321,000 travellers) decline in international tourist arrivals to Israel in 2020 (January through March 2020).  From India, the decline is approximately 4,000 visitors over the same period.  The financial impact from this change has also been significant.  Israel’s tourism industry has been impacted by approximately US$ 500 million per month in direct revenue from incoming tourists.”

Digital and marketing strategy

Despite the standstill, tourism boards are utilizing this lull period to promote their destinations though digital means. Also, majority of the destinations are aggressively re-strategizing their marketing activities to go out in a full-fledged way.

“As a destination, we are turning to creative campaigns and virtual platforms to maintain a connection with the visitors to ensure them to stay inspired to visit Abu Dhabi soon and stay on top of their minds. Our recent virtual platform #StayCurious gives audiences a taste of the emirate’s unique ambiance and hospitality through an interactive 360-degree experience from the comfort of their own homes. People might not be able to travel right now but their minds can. They can still dream, explore, learn, connect and most definitely they can still be curious to visit us soon,” Bejan Dinshaw, Country Manager - India, DCT Abu Dhabi, said.

Speaking about digital initiatives, Al Midfa added, “We maintain a strong online presence for the emirate, launching a number of campaigns such as the #visitSharjahSOON campaign which highlights our presence in a new way during these challenging times. The campaign underlines the themes of positivity and finding moments of serenity while encouraging people to enjoy this break from daily routine enforcing the idea of “stay home now” as a method of ensuring greater community safety and health preservation, allowing society to return to normal life with a sense of hope, vibrancy and achievement when the time comes.  Followers will be given hints and reminders of Sharjah’s destinations, bucket list ideas and inspirational travel suggestions, while reminding all that Sharjah’s stunning landscapes and engaging attractions wait peacefully to welcome visitors again SOON.”

Bahrain in 2016 developed an integrated strategy aimed at elevating the Kingdom’s tourism industry by attracting investors and providing a suitable environment to incubate tourism projects. The destination plans to go ahead with the same vision and a lot more focus on Indian weddings segment.

“Our marketing strategy at BTEA will remain unchanged as we continue to focus on developing unique tourism products and experiences that sets Bahrain apart from its competitors, focusing on driving in family tourism to increase the Tourism sector’s contribution to the national economy in line with the Kingdom’s 2030 Economic Vision,” Ali Follad, Tourism advisor, Bahrain Tourism and Exhibitions Authority (BTEA) said adding that we will also continue to work closely with our representative office in India to promote Bahrain as an ideal tourism destination for Indian weddings & corporate events through participating in events and exhibitions that provide us with the ideal platform to highlight the Kingdom’s tourism potential and promote its unique attractions. “During these events, we are also provided with the opportunity to meet, network and establish mutually beneficial relationships with representatives of the tourism industry, this further support our efforts in achieving our long-term strategy which focuses on the development of the local tourism sector and strengthening Bahrain’s position on the global tourism map,” Follad said.

Recovery strategy

Due to the COVID-19 pandemic, the path ahead has a lot of unseen challenges. Solutions need to be out of the box to tackle this issue. Destinations as per their estimates are drafting recovery strategies to bounce back strong.

“We see our recovery coming across three phases. The first, the pause phase, is where we are today and our immediate focus is on ensuring that the strong relief programme put in place by the Federal and Dubai government to support travel, tourism and all related sectors is swiftly executed. In the second phase, we will prepare to welcome limited travel from this autumn, as we gradually reopen sectors and markets. This prudent approach to reopening travel is a global question given many airports and air spaces remain closed, so we are working with all relevant bilateral organisations to have a coordinated approach to opening up. We’re confident that once we enter the final phase of full reopening and return of confidence in travel behaviours, Dubai will be ideally suited to deliver the exceptional customer experience in this ‘new normal’ of tourism,” a spokesperson from Department of Tourism and Commerce Marketing (DTCM) Dubai said.

Bahrain is set to empower its private segment by organizing joint promotions and engage the travel trade across its markets. Follad added, “At the BTEA, we developed a crisis management action plan which includes developing a communication strategy and effective media engagement as well as building a trust-based coalition; keeping positive and continuous contact with tour operators and focusing on co-marketing and joint promotion with other tourism partners.”

Post COVID scenario

In the recent years, the Indian outbound has been a major highlight with significant increase in aspirational travellers segment who are venturing out to discover novel experiences. Middle Eastern destinations are confident that India will remain a major focus market post COVID crisis. Also, this will be an opportunity to increase their market share from India, as these destinations are easily accessible and already have excellent connectivity with India.

“India and Israel have enjoyed a good relationship across all sectors, including tourism. For the last few years, India has been, and still is, the second largest contributor in tourist arrivals to Israel from Asia, following China. With significant opportunities to increase tourism to Israel, we will be focusing on attracting international travellers to our destination.  The current situation has had a huge impact on global economies, and we hope it is resolved soon.  I am optimist that the travel industry will pick up momentum once everything returns to normal however, I believe that the industry will take time to revive, beginning with domestic sector and then building up international tourism,” Yahia opined.

As global tourism is back on track, short-haul destinations will be majorly benefitted after the domestic market. Abu Dhabi expects a spike from India market. “We foresee a spike in Indian arrivals. India is the leading overseas market for Abu Dhabi considering the country’s proximity to the emirate. I believe once this crisis subdues, closer to home will define travel for the near term. People will set their sight on short haul destinations; and long-haul destinations will take much more time to gain traction as people would prefer to stay close to the safety of home,” Dinshaw added.

Similar to the South East Asian destinations, Middle East will also get a chance to tap the weekend travel segment. DTCM spokesperson added, “India is the number one source market for Dubai, so it will continue to be a priority for us and a key focus in terms of visitation. Due to the proximity of India, it’s always been very popular in terms of short-haul or weekender trips.  Looking at global trends and responding collectively to the market changes, we already see there will be a lot less group travel and a lot more FIT who will book closer to their travel date.”

Echoing similar opinion Al Midfa said, “A spike in Indian visitors to Sharjah is very much expected when the time comes to travel again.  Sharjah has always benefitted from being a short-haul destination for India and this will become evident again once the threat of the COVID-19 has passed. Located at an approximate distance of 2,160 Km from India, Sharjah is just 3-4 hours away depending on the city you travel from. This means a visit to Sharjah from India can be undertaken in a weekend.”

Bahrain has recently emerged as a wedding destination for India market. Post COVID, the destination will once again look to aggressively attract this segment from India. “In the past few years, Bahrain has become the ideal destination for hosting weddings and celebrations, especially for the Indian Market. In 2019, we hosted four major Indian weddings, attracting more than 2,000 visitors and contributing US$ 5 million to the Kingdom's GDP, further promoting Bahrain as a prime wedding destination. Hence, once things go back to normal, we will participate in various regional and international events to promote Bahrain as an ideal destination for hosting weddings and celebrations, encouraging soon-to-wed couples to select Bahrain as their destination to celebrate their special occasions,” Follad said.

Future visa regime

Currently, one of the most discussed topics across the industry is future of visa regimes and changes post covid-19 crisis.

Speaking about the visa regime, Al Midfa said, “Pre-COVID, the travel and visa requirements for Indian visitors were that all Indians with Indian passports valid for more than six months could apply for a visa through a number of agents and channels and Indian Nationals, with a valid US Visa (minimum six months) could get a Visa on Arrival at the UAE Airport. Till passenger travel between countries was banned due to the pandemic, Air Arabia operated direct flights to Sharjah from 13 Indian cities. Of course, as things are now, the situation has changed entirely but we expect the flights and visa situation to resume as much as possible when the crisis is past, bearing in mind that the travel restrictions may remain in place in some form or other for some time. While this virus is accelerating all over the world, our focus is adapting and evolving with the rest of the globe, spreading the international message of safety.”  

Over the years, Israel has relaxed and simplified its visa offerings in India market. The destination is looking to further make visa availability seamless for Indian travellers. Yahia added, “Since opening the Israel Tourism Office in India, there are many visa reforms that have been introduced for travel to Israel including the opening of a Israel Visa Processing Center in Kolkata, relaxed visa documentation was brought in for applicants who have availed visas and completed travel to Schengen countries, US, Canada, Australia or Israel, one-year multiple entry visas for business travellers to Israel and changes in visa fees. Continuous efforts are being taken towards bringing more changes to make the process faster and easier for Indian travellers to visit Israel.”

Bahrain with a clear focus on attracting MICE and destination weddings are incentivizing and easing group visas which will be applicable even post COVID.

Follad concluded, “We have teams that provide support by easing the process of tourists acquiring visas in certain occasions such as wedding celebration or MICE events. Our team ensures the smooth flow of events and handles the event logistics including visas, immigration, and customs as well as obtaining permission to facilitate the entry of visitors attending the event.”

In a major step taken by the Government, domestic air travel is all set to commence operations starting May 25, 2020. The Ministry of Civil Aviation (MoCA) has cautiously chalked a strategy to restart services with a new set of guidelines and SOPs which has been discussed with all the stakeholders.

Hardeep Singh Puri, Minister of State (I/C), Ministry of Civil Aviation said, “We need to have a balance between life and livelihood during this crisis situation. I think we have come to a time where we need to open domestic civil aviation. After we announced yesterday, we have put up the new SOPs on the Ministry’s website and have shared it with all stakeholders. A very comprehensive process has been undertaken which involved all our stakeholders including; airlines, airport authority, security, etc have all agreed. Starting Monday May 25, we will recommence domestic civil aviation in a calibrated manner.”

In terms of capacity, MoCA has announced that in metro cities including; Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Kolkata, flights will be allowed to operate one-third of their capacity. While in the metro to non-metro cities and vice-versa, where the weekly departures are more than 100, each flight can operate one-third of its capacity. For all other cities, airlines are free to operate on any route on one-third of its capacity. These restrictions do not apply for UDAN flights that operate under the regional connectivity scheme. He further said, “By calibrated manner we mean that we will operate to a limited extent of the required and approved capacity of summer schedule of 2020. Metro to Metro will be 33.33% of the approved summer schedule. For Metro to Non-Metro, where weekly departure is greater than 100, 33.33% of the summer schedule. Metro to Non-Metro, where weekly departures are below 100 weekly flights, operators can operate any route in the 1/3rd capacity. All other cities operators can operate any routes in the 1/3rd.”

Besides there have been a lot of uncertainty regarding the quarantine policy. The Minister has said that as of now there will be no quarantine post travel as it is domestic travel and we are taking enough preventive measures.

As the capacities have been reduced to a third, there will be a high demand with limited supply, thus creating a demand-pull inflation. There will be a skyrocketing of airfares due to this pent-up demand. To further regulate airfares, MoCA has introduced various band fare measure. The Ministry has divided the domestic aviation routes under seven bands; A] flight duration less than 40 mins, B] 40 mins to 60 mins, C] 60 mins to 90- mins, D] 90 mins to 120 mins, E] 120 mins to 150 mins, F] 150 mins to 180 mins, G] 180 mins to 210 mins. The ticket fare for each band will have a minimum and upper limit.

Speaking about the fare bands Pradeep Singh Kharola, Secretary-Civil Aviation, Government of India said, “We have categorized all routes into seven categories. As an example of the fare band, Delhi-Mumbai is the densest route in the country. In this case of Mumbai-Delhi route the lower fare is set at Rs. 3500 and highest is Rs. 10,000. To make it more efficient, we have a second rider that is 40 per cent of the seats must be sold under the mid-point of the band, which means will be less than Rs. 6700. This is a temporary formulation as there is a huge amount of pent up demand. This fare will be applicable till 11.59 pm on August 24.”

Puri added, “We have studied airfares structure and also looked at corresponding rail fares. We want air travel to be affordable and all citizens. We are the world’s third largest domestic civil aviation sector and we have to bounce back and gradually become the first. We are also conscious of the fact that airline is working on thin margins, so we have kept them in mind while drafting. This is not fare fixation in the normal time. We will have a limited flight in this period and there is a chance of high fare due to the tremendous demand. Once we exit from these three months period, we can return to status quo ante of the pre-covid scenario or as per market situations.”

Also, initially there have been a lot of discussions pertaining the empty middle seat for social distancing. In an earlier statement, International Air Transport Association (IATA), was not in favour of this move as it would drastically reduce the load factor and will change the dynamics of aviation. MoCA has reiterated that the middle seats won’t be kept empty.

Puri said, “If we keep the middle seat empty, still the social distancing requirement will not be met. Nowhere in the world this has been perceived as an important regulation. The system of not keeping middle seat empty has worked for us during the Vande Bharat mission as we have taken other preventive measures. But if we leave middle seat vacant the economics of the airlines and dynamics will change.”

To read the entire guidelines published by the Ministry of Civil Aviation click here.

Fortune Hotels, a member of ITC’s hotel group, has announced the launch of ‘Safe Stays At Fortune Hotels’, a comprehensive safety and hygiene programme for guests and associates that revolves around a safety and hygiene protocol, from pre-arrival to check-out. This programme is set on 10 pillars of safety and hygiene that will be diligently implemented across its hotels as they re-open/ commence operations.

Further, the chain has tied up with TQS Global Management System, a leading Food Safety and Research Firm, to embark on a journey to acquiring CORE 19 (Covid Secure) Safe Practices Protocol blended with Deming Cycle certified under ISO Standards, for its properties pan India.  All Fortune hotels will undergo a phase wise implementation, training and certification exercise over the next few months. TQS Global has been associated with the Fortune Hotels for over seven years now and has effectively trained over 350 associates for OFQUAL British certification and implemented food safety and hygiene protocols across the chain in various capacities. 

Samir MC, Managing Director, Fortune Park Hotels said, “The world is undergoing a vast change in the way we travel, stay and socialize. We realise that the Covid-19 outbreak will change the nature of holidaying and doing business altogether. This hygiene programme and certification are thus important steps forward towards re-defining our spaces and experiences thereby creating a very safe, hygienic and stress-free environment for our guests.”

The ‘Safe Stays at Fortune Hotels’ programme, comprises an all-encompassing protocol and best practice adherence around 10 key pillars namely- Deep Cleaned & Sanitized Rooms, Safe Public Spaces, Social Distancing for Hospitality, F&B Hygiene and Safe Handling Procedures, Safe Meetings, Hygiene Check Stations, Trained and Sensitized Staff Members, Hygiene Code of Conduct, Emergency Response Protocol and No Contact Payments & Bill Settlements. 

Aimed to provide a comfortable and positive experience to guests, this end-to-end programme will comprehensively cover all the departments & sub-departments of hotels including the heart-ofthe-house and the guest facing areas.  It will also go beyond soft actionables and basic norms like wearing masks and social distancing and help in creation of robust safety and hygiene processes and practices across all its hotels.

The process shall include implementation and certification towards Covid safety protocols and ISO 9001 which is a Standard developed for the certification of Quality Management Systems (QMS) to enable effective system integration. During the complete project, comprehensive implementation of CORE 19 (Covid Secure) Health & Safety Management System will be accomplished with the aid of manifold tools both online and on ground. The program will consist of QMS Principles blended with Occupational Health and Safety Analysis Systems (OHSAS) guidelines and the ‘Safe Stays At Fortune Hotels’ protocol along with the stringent guidelines from the Indian and International bodies such as Ministry of Tourism, FSSAI, Codex, WHO, FAO and CDC.

On the day 4 of economic stimulus package announcement under Atmanirbhar Bharat Abhiyan, Nirmala Sitharaman, Finance Minister, Government of India has announced various reforms for the growth and development of the Civil Aviation Sector. Aviation reforms have been a demand from the industry for a very long time. Also, Civil Aviation has been identified as one of the sectors under the new horizons for growth.

Sitharaman said, “After Prime Minister Narendra Modi’s address to the nation on building an Atmanirbhar Bharat we have been announcing various steps in several tranches to give stimulus, help and give little assistance as a government. PM had also said that we should prepare ourselves for a tough competition and face challenges of global value chain. We are not looking inwards it is not an isolationist policy. Many sectors need policy simplification. Once we decongest sectors, we can also provide necessary boost for growth and employment. PM has a strong record of taking up reforms. Today’s measures will be on structural reforms and for sectors which are new horizon for growth.”

Under the civil aviation sector, Finance Minister announced policy reforms for Airports, Airspace management, and MROs. Out of the total Indian airspace only 60 per cent is freely allowed for commercial aviation usage which is set to be further increased. This will enhance the fuel efficiency, time optimization in the commercial aviation sector. This move will bring a total benefit of about Rs 1000 crores per year for the aviation sector.

Speaking about airspace management Sitharaman said, “Currently, only 60 per cent of Indian air space is freely available, airspace is restricted for civil purposes and defence purposes. Which means all these years we have been flying to our destinations not through the shortest route, which means travellers are spending more time in the air. This has to be rationalized and optimum utilization of air space will have to happen. Even the fuel spent is imported which is expensive and customer ends up paying more price for the ticket. Rationalisation will happen which means we will reach to our destination in short time with less fuel consumption. This is an environmentally friendly step and flying time will reduce and will have a very big implication in India’s fuel import bill. Civil Aviation is up for a big leap and has the biggest potential for growth in India.”

One of the major announcements by the FM is to develop India as a Maintenance Repair and Overhaul (MRO) hub. This step will surely help in reduction of the maintenance cost and also will be a revenue generator.

She further said, “We want to make India MRO hub; this is a very big business. Most of the Indian aircrafts go abroad for maintenance. We have all the capacities, manpower, soft skills, etc in India. We can be the centre for many of the flights going to South East Asia, long distance to Australia and similarly westwards also. We want to make sure that MRO ecosystem is created in India for which the tax regime is already altered. Not only civil aircrafts, but also defence aircrafts will be benefiting from this. Maintenance cost of all airlines will come down which will have a ripple effect on passengers.”

Speaking exclusively to T3 magazine, Bharat Malkani, Chairman & Managing Director, Max AeroSpace and Aviation said, “For the MRO industry it is a huge step as the Government has recognized this industry is of global standards and has a lot of potential. With this move MRO industry will certainly be more competitive in the Global space and also it can be a major employment generator. This is a huge step towards making this industry world-class.”

Also, the Airport Authority of India AAI has awarded three airports out of six bids for Operation and Maintenance on Public-Private Partnership (PPP) basis. The annual revenue of the six airports in 1st round - Rs 1000 crores (against current profit of Rs 540 crores per year).

She further said, “In the round two, six more airports are up for auction and AAI will do it on PPP basis. AAI will get a down payment of Rs. 2300 crore. Additional Investment by private players in 12 airports in 1st and 2nd rounds expected around Rs. 13,000 crores.”

The initiatives by the Finance Minister have been welcomed by the private players. Speaking about the initiative Dr. GVK Reddy, Founder & Chairman, GVK said, “We welcome the announcements made by the government today in the Civil Aviation. The move to invite PPP in six more airports will provide the AAI resources to develop smaller airports across the country and popularise the government’s Udaan scheme. The plans to make India a global MRO Hub will ensure savings of precious foreign exchange and enable Indian airlines to get their aircraft serviced locally. I am sure that the government under Prime Minister Modi’s dynamic leadership, will take many more steps in the coming days to get our Economy back on rails post the Covid-19 crisis.”

Lauding the initiative, Vasudevan. S, Partner, Infrastructure Government and Healthcare, Aviation, KPMG in India said, “The aviation sector is the hardest hit because of the global pandemic with an estimated US$500 billion loss in airline and airport revenues in FY20. The topline impact for domestic carriers and airport operators India is forecasted to be US$ 3-4 billion this fiscal alone. It is heartening, therefore, to see the Government’s announcements addressing three key drivers of business recovery - costs, investments and revenue. Airport PPP transactions will help unlock value for AAI and State governments given current investor interest and long-term potential of the Indian market. Rationalizing the MRO tax structure has been a long pending demand of the industry and it is good to see that happening finally, but more needs to be done to create a level playing field, attract foreign investment and make it profitable. Optimizing use of air space will certainly open up the possibility to cutting fuel burn and improving turnarounds both on domestic and international routes, both likely to have a positive impact on their bottom-lines in a cash-guzzling business. Good tidings for the sector overall, which is in a deep hole right now.”

In a bid to revive the economy post Covid-19 pandemic, Prime Minister Narendra Modi unveiled a Rs 20 lakh crore package, which is almost 10 per cent size of the Indian GDP. The package has been released under Atmanirbhar Bharat Abhiyan for all the sectors to benefit and has given a major impetus for the local brands. Today, in a press conference Nirmala Sitharaman, Finance Minister, Government of India has announced the details of the bailout package. Despite various announcements and measures, Tourism and hospitality which is 10 per cent contributor to the Indian GDP has not been mentioned.

Addressing the media Sitharaman said, “Prime Minister Narendra Modi has laid out a vision after various consultations. Essentially this is to spur growth and create self-reliant India. Economy, Infrastructure, Demographic, Demand, Technology and Digital are the five pillars of Atmanirbhar Bharat Abhiyan. This package will help to rebuild Self Reliant India. The ease of doing business, ease in compliance and regulations are included. Intention is to build local brands at global level.”

The Finance Minister has also stated that beginning today, for the next few days there will be various announcements putting out the vision which has been started. Also, the RBI is coming with a lot of liquidity infusion measures.

Indirectly, a lot of travel and hospitality companies are covered under the Micro, Small and Medium Enterprises (MSMEs) segment and today there have been various relief measures announced for this segment. Out of the 15 different measures, six measures have been announced for the MSMEs including;

Collateral free automatic loan for MSMEs which will give facility up to Rs. Three lakh crores, with moratorium for 12 months, this will be available till October 31, 2020. Sitharaman added, “This measure will benefit 45 lakh units to resume business. This is for standard MSMEs who have been affected by lockdown and are struggling to restart business post lockdown.”

She further said,We will infuse Rs. 20,000 crores though infused debt provision to stressed MSMEs. Two lakh MSMEs will benefit out of this, NPAs or stressed MSMEs will benefit out of this. Also, Fund of Funds is being created by infusing Rs. 50,000 crores into MSMEs. This is for those MSMEs who are doing viable business and potential and require handholding. This will help them to expand capacities and will help them grow further.”

To further expand the benefits to the MSME segment, which is the backbone of the Indian industry, the definition has changed today to include more businesses and give a scope for them to grow further.

Sitharaman explained, “The definition of MSMEs has been changed in the favour of MSMEs and they look at growing and will also get benefits. Investment limit which defines an MSME is being revised. The idea is that, even with increased turnover and investment the business remains under MSMEs and can reap benefits. Additional criteria are brought in based on turnover, apart from investment size. The distinction between manufacturing and service units were different which has been removed. Now all will be defined similarly. Eg. earlier up to Rs. 25 lakhs investment was a micro unit, now it has been changed to Rs. 1 crore. Services will also be called micro under Rs. 1 crore. Turnover up to Rs. 5 crores will also be called micro.”

Also, for government procurements, any tenders up to Rs. 200 crores will no longer be under global tender route. This will benefit the MSMEs to bag the tenders. E-market linkage for MSMEs will happen. Any pending payments by Government and PSUs to MSMEs will be done within next 45 days all receivables will be cleared.”

Also, another relief announced under the direct tax segment was a 25 per cent reduction on all TDS and TCS. Finance Minister added, “We have from tomorrow till March 31, 2021 have reduced TDS and TCS rates by 25 per cent and this shall apply to all payments. This will be coming in from tomorrow. This reduction will release Rs. 50,000 crores in the hands of people.”

The travel and tourism industry are living through one of the darkest times in human history. With governments across the globe closing their borders, airlines shutting operations, cruise liners suspending any schedule until further notice, NTOs are brainstorming and drafting strategies and marketing plan to remain at the top of the minds of travellers.

Today, travel has evolved from luxury to necessity and destinations understand that whenever situation stabilizes and normalcy is reinstated, travellers are set to pack their bags and travel. There might be a dip in long-haul travel but there is a very bright chance of short-haul destinations benefitting post the pandemic. When the entire globe is reprioritizing their business strategies, the question is will India remain a top priority market post the pandemic?

Magnitude of impact

To begin with, the pandemic started from a destination which is close to most of the major tourism kingpins in the Asia Pacific Region (APAC), including the world. This led to an early closedown and restriction in the APAC region. The region is set to witness a major impact in terms of tourist arrivals going southwards.

Speaking about the impact, GB Srithar, Regional Director, India, Middle East and South Asia, Singapore Tourism Board, said, “The impact of the Coronavirus Disease 2019 (COVID-19) outbreak on travel, tourism, aviation and hospitality is unprecedented. We initially anticipated a 25 per cent to 30 per cent decline in visitor arrivals globally, but we can expect further decline now that more countries have reported outbreaks and travel restrictions have been implemented around the world.”

The tourism segment started witnessing a setback even before the outbreak became a pandemic. Leisure travellers started travelling less with the Covid-19 outbreak news at the initial phase.

In an interview on March 23, 2020 before the outbreak in India, Cholada Siddhivarn, Director, Tourism Authority of Thailand – Mumbai office said, “In my opinion, everybody is affected not just only people in the tourism industry and its supply chains but all businesses across sectors. Holidaying is all about emotions. In the current scenario, people are not in the mood for travel of any kind, be it for work or leisure hence there has been a dip in the travel industry worldwide. Most of the airlines have suspended their flights from India to Thailand, which has impacted hotels, restaurants, travel(local) industries in Thailand. But amid the madness, we stand by our fellow partners to overcome this together.” There is a total ban on any domestic and international schedule services at the time of writing this story.

Echoing similar opinion, Trust HJ Lin, Director of India, Asia Pacific And Middle East, Taiwan Tourism Bureau said: “At this moment, Taiwan has closed its borders to international tourists, and is also restricting domestic travellers within Taiwan. We were amongst the earliest to react, with testing and screening measures that came into place in Dec 2019 itself. While that has kept the situation under check, we are ensuring transparency in our process, ensuring all information is given promptly and continue to reassure the world that we are dedicated in our efforts. With almost all countries closing borders and most flights globally cancelled, this situation is unprecedented and we stand united with the world and India in dealing with the situation.”

Will India remain a priority source market?

…And the answer is affirmative. Most of the destinations in the region are set to look at India as one of the most important markets post the covid-19 issue. Looking at the growing outbound numbers and predictions, Indian outbound will be one of the first to revive.

“India has always been a priority for marketing South Korea as a tourist destination. There is great potential in this region with more than 65 million passport holders and millennial travellers who are willing to experience new destinations every time they plan their holiday. It is imperative for us to be present as a destination offering to the Indian travelers,” Jong Sool Kwon, Director, Korea Tourism Organization, New Delhi, said.

Being more optimistic, destinations are now looking to restructure and revise their targets. At the start of the year, Taiwan had announced that 2020 would be the year of promoting their mountains in India.

“India has been and will remain an important market for us. In the past few years, we have seen a steady increase in traffic from India. And once things improve and travel resumes, this theme of mountains becomes more pertinent than ever. Holiday for Healing is not just meant for trekkers or nature enthusiasts, but also for families, couples and solo travellers - encouraging them to choose their style of holidaying but spend it more focussed on enjoying the serene within and the beauty around, rather than going overboard on consumerism. Initially, we were looking at a 20 per cent growth in this year’s tourism from India. We will only be able to issue a revised estimate for this year and next, once the situation improves,” Lin added.

Reiterating the confidence in India market, Thailand feels that India will always remain their priority market despite challenges. In 2019, Thailand witnessed a 25 per cent growth from this market.

“India, has always been one of the important source markets for Thailand. 2019 witnessed an increase 0f 25% in Indian arrivals, approximately 1.96 million visitors. This year the entire tourism industry has witnessed a dip in tourist arrivals globally, but I am sure once the pandemic ends there is no looking back. India is and will always be an important market for us as it has huge potential,” Siddhivarn said.

Preparedness Index

Majority of the asian destinations have been lauded across the globe for the measures and efforts they have taken to contain the pandemic. Destinations in this part of the world are ready and are looking at the highest level of sanitization and hygiene to tackle this issue soon.

“Since the start of the COVID-19 outbreak, the Singapore Government has progressively implemented a series of measures to reduce the risk of imported cases and spread of the virus. We have also been communicating regularly with our valued partners to keep them updated of the situation in Singapore, and the measures we have taken to contain the spread of the virus. The key priority for all of us in this sector now is to support our governments’ measures to keep their citizens and residents as safe and protected as possible, reducing the risks of infections through any kind of travel,” Srithar said.

Similarly, South Korea has been one of the nations which almost  stopped the widespread and are similarly taking measures so as to welcome travellers at the earliest. “Safety is our first priority when it comes to travelling in Korea. South Korea has been applauded world over for its proactive approach on containing COVID-19 pandemic. We are working to achieve similar standards when we welcome the travellers post coronavirus issue is resolved,” Kwon informed.

Changing strategies

Globally, it has been accepted that the way of traveling will surely change, travellers behavior will change. Travellers will be more cautious about not only security but also the safety and hygiene while travelling to a destination. To cater to these travelers, destinations need to revamp and tweak their strategies.

“As we focus on recovery, Taiwan will embark on this new campaign focusing on: ‘Holiday for Healing’. Focussing on enriching holidays which emphasise on quality time being spent together by families, friends. Rejuvenating experiences, rather than commercialised options. These will include greater focus on our mountains, natural hot springs, trekking, birdwatching and similar experiences. Greater interaction and experience with the culture of Taiwan and its people instead of large, crowded festivals. And finally, continued transparency on the health situation, and prioritizing the well-being of all visitors. We have received global praise for our deft handling of the health situation in Taiwan, with compliments for being prompt and transparent. Even in the aftermath of the virus, transparency of the situation and well-being of our visitors will continue to remain a priority,” Lin said.

Thailand also prioritizes on educating the travel trade during this period and showcasing newer destinations which is vastly unexplored by Indians. “Our primary objective would be to educate and reach out to our travel trade partners across cities with various product offerings and assure them safety while traveling to Thailand. Post which, we will concentrate on the marketing and joint promotions activities across India. With COVD-19 and work from home scenario, the atmosphere has not been at its best. Post COVD-19 there will be a change and a sudden demand for travel to places which not only entertain but give a feel-good experience. Our strategies will be directed towards this need and will showcase Thailand in a newer perceptive,” Siddhivarn revealed.

With a proper plan in place, South Korea is set to go the digital way. The destination is using all its digital tools to remain at the top of the travellers’ minds. “We are working more on our digital strengths currently and have launched webinars to educate our travel trade partners on the latest product offerings of South Korea. Once the COVID-19 situation is over, we plan to do multicity trainings with OTOAI. We will be reaching more than 2500 travel agents this year. Our Social Media campaigns will be running parallel to the webinars. By the time this situation gets resolved travel agents will be well prepared to offer a new destination to their clients,” Kwon informed.

“STB is leading the Tourism Recovery Action Task Force (TRAC), which brings together key stakeholders from the private and public sector in Singapore to develop and coordinate the recovery strategies and plans for Singapore tourism. These plans will be launched at an appropriate time. I am hopeful that this too shall pass and the travel industry along with the rest of the world will bounce back to normalcy and inherent dynamism,” Srithar concluded.

The covid-19 pandemic has brought the global economy to a standstill. This can be easily termed as the darkest phase in the last century of the history of mankind. Majority-if not all- sectors have taken a severe hit during this turbulent phase. One of the first industries to witness a major crisis is the travel and hospitality industry. The industry has no doubt witnessed a nightmare in terms of impact but still looks to bounce back soon post the issue. One of the major service providers of the industry, hotels are supporting the nation in fight with the COVID-19 by offering rooms as quarantine facility, helping the stranded travellers, converting rooms into workstations for corporates, which is a much bigger and needed service during this unprecedent scenario.

Hospitality turns hospital, workstations; hoteliers turn hero

When there has been a lot of negative sentiments around the industry and across the 7.8 billion people across the globe who are all potential travellers, here is a bright side of the hospitality industry where hoteliers are turning into heroes and helping the community during these never-seen-before-times.

Speaking about the community service,  Vijay Dewan, Managing Director, Apeejay Surrendra Park Hotels and Chairman, CII West Bengal State Council said, “Zone by The Park Kolkata is working with the West Bengal Government and have assigned 20 rooms on a daily basis for the health practitioner, medical staff battling the COVID-19 outbreak. Few of our hotels are operational and we are ensuring our best to deliver the services and to keep everyone safe. We are also working with the central government, state government and various authorities to support them in this time of crisis.”

Apeejay Surrendra Park Hotels is also undertaking various initiatives to support senior citizens and the underprivileged who are suffering the most due to lack of food supplies and essential items. “We have launched a neighbourhood service initiative, #THEParkHeartOfHope across our hotels, wherein anybody especially the senior citizens can call us for any help, be it groceries, medicines or food. The team respond to the request immediately taking all safety precautions. We are also providing free food every day to the underprivileged and community warriors countrywide across our hotels. Till now we have provided free food to more than 3,000 people,” Dewan added.

Shwetank Singh, Vice President – Development and Asset Management, InterGlobe Hotels (IGH) said, “At ibis Delhi Aerocity, we are providing full support and assistance to the government in their efforts to control the Covid-19 outbreak. At present, we have reserved 149 rooms across three dedicated floors for guests who have been instructed by authorities to undergo a self-quarantine process after returning from abroad. We remain committed to continuing this facility till this pandemic is managed. We have also coordinated with the concerned embassies and have offered our services to international travellers who are stuck during the lockdown. Our hotels have offered the best available rates to these guests and are in constant contact with the airport authorities and embassies to ensure these guests can be transported to the airport as flights are arranged by their respective countries to take them back.”

Also, a lot of the IGH properties have been converted into work from home facilities. “Our properties in Pune Hinjewadi and Chennai SIPCOT have been taken over by our key accounts to provide work from home facilities from the hotel rooms for employees as a part of their respective business continuity plan.”

Extending similar services to the nation, Rajneesh Malhotra, Vice President Operations & Asset Management, Chalet Hotels said, “With the rising number of COVID-19 cases across the country, hospitality industry has come forward to pledge their support to those who are working tirelessly through these trying times and the community at large. We have always been conscious about our role in the community. Over the last few days we have rolled out several initiatives such as distributing food packets to government employees and healthcare professionals who have been working tirelessly despite the lockdown. In these troubled times we also wanted to do something that would usher in cheer so we’ve lit up our hotel buildings with messages of hope and positivity, this has definitely brought a smile on many faces.”

Adverse impact

The global travel and tourism started witnessing almost a total downfall with majority of the governments issuing travel advisories for their citizens asking them not to travel in February and March. Occupancies started diminishing, ARRs have taken a backseat and cash flows have become a major challenge for the industry.

“A dynamic services industry like hospitality and travel have been adversely impacted due to the spread of novel Coronavirus. The growth and the business have come to a standstill, where the hospitality sector is facing the adverse effects of global health crisis with occupancy, cash flow and ARR taking a backseat. This is going to be a very challenging year for all of us. Since, our industry is allied with tourism, travel and trade sectors, the loss is being faced by all of us. Undoubtedly, we will need a good amount of time combined with support from the government to slowly get back the track,” Dewan said.

As per reports, the industry is set to witness as high as 80 per cent degrowth compared to 2019. The sector is still coming to terms with low room demand and uncertain future bookings as the hotels are unable to secure any future business.  “Largely, the corporate travel, leisure demand and MICE have also been severely hit in the last few weeks. The calendar year had a strong start with January and February bringing in usual business, however, with Covid-19 outbreak, the circumstances triggered cancellations and fall in occupancies. Research papers such as HVS and Hotelivate have estimated the losses would range anywhere between US$ 1.5 Bn (early stage assessment) – US$ 3.5 Bn (assessment post the lock down) for the organised sector of hotels, given the situation is controlled by July 2020. Having said that, these numbers may differ and can even go up to US$ 4.5 Bn if the situation remains the same till Q3 of FY 2021,” Singh said.

Citing STR, report Singh said that the occupancies for the country wide hotels were earlier estimated at ‘-44 per cent’ against last year. “The same number is now reporting as low as ‘-80 per cent’ according to the data available till March 2020. As a matter of fact, the occupancy pan India during the last week of March was as low as 11 per cent which is extremely rough for the entire sector. The same goes for the blended nationwide average daily rates (ADR) which have seen a drop of around 14 per cent – 20 per cent.”

Cancellation and Refund policy

Initially, a lot of questions have been raised that hotels are not willing to refund the booking amount. But as per official statements, majority of the branded chain hotels have borne the brunt and given either 100 per cent refund, credit notes, or have requested to postpone the bookings. “Our hotels are managed by reputed global brands and their cancellation policies are in sync with the need of the hour,” Malhotra informed.

Echoing similar opinion, Dewan added, “Apeejay Surrendra Park Hotels have been very accommodating in its booking policies, cancellation as well as postponing dates for later. We understand that these are challenging times and we want to comfort our guests in such time of crisis. Our teams are available in case there is any issue.”

With a guest first strategy, players like IGH have taken a step to ensure all refund for room bookings and MICE bookings. “Our hotels have not had any such problem as we have returned all booking amounts for cancellations made for room bookings and events scheduled at our hotels. This was a business decision taken at the beginning of the pandemic as we understand the impact this has on travellers and guests during these situations. It is important to understand that these cancellations have resulted due to circumstances which are beyond one’s control and we support not only the government but also our guests in these difficult times,” Singh revealed.    

Construction slowdown

The pandemic has not only bought the hotel construction scenario to a temporary standstill but there is a possibility that the restart of the work will take much longer time. As the entire industry has witnessed a major cash crunch, the priority for the industry is to stock up cash for survival. And, the construction of new projects will be the least priority which will slowdown the pace of supply for a while.

“Most hotel companies including us have stopped work on the construction sites due to the lockdown. But even once the lockdown is lifted, we expect the development side of many projects to witness a slow recovery due to the following reasons : Cash conservation – capital availability will remain constrained, but debt rates are likely to reduce; remobilising of the labour force - as most workers have left from site areas during the lockdown, their return may be restricted and can take time; weakening of Indian rupee – this will make the imported items expensive for the Indian developer; supply chain disruption- many hotels including us are dependent on foreign countries (including China and Europe) for the material supply. This is likely to remain effected for a while,” Singh said.

Some players feel that not only there will be a slowdown in the hotel construction, but there will be a lot of modifications to the project depending on the scenario post the Covid-19 pandemic. “All ongoing projects will experience delays and some of the projects may be modified substantially basis the business environment that emerges post COVID,” Malhotra added.

Revival Strategies

The scale of the covid-19 spread across the globe has been vast and this has left an air of uncertainties hovering around. Predicting a recovery time period looks extremely difficult at this moment as even if the lockdown is lifted, not every sector and service will be operational with immediate effect.

But being optimistic, hoteliers have started to chalk plans to relook their businesses post the coronavirus issue.

With a hint of positivity, Singh said, “Such dire situations come with a silver lining. We see this as an opportunity to take out all business inefficiencies that may have crept in over the years. Once the travel restrictions are removed, we will relook at our hotels with a fresh lens. We will be treating each hotel as a new opening and will reposition them accordingly. Furthermore, we are already working on a detailed sales, marketing and PR plan along these lines.”

With a complete process in place, Chalet Hotels is also set to work on timebound strategies. “A comprehensive strategy document is in works and we will roll it out as soon as clarity on the COVID timeline emerges. We are working on short, medium, and long term approaches to mitigate the impact of this crisis, however these will take shape once we have clarity on how long the COVID-19 crisis is going to last,” Malhotra added.

Also, at the prima facie stage, hoteliers are looking at the domestic market to help them bounce back. “Our focus will be on the safety and hygiene of all our guests and employees. We will focus heavily on local and domestic market to start with. The hospitality and tourism segment are expected to see an upsurge in demand from domestic travelers post the containment of virus. Since, movement of foreign tourist arrivals might still be limited, there is a huge potential for all the hotel segments to attract domestic travelers from nearby cities,” Dewan said. 

There has been a lot of talks about restarting the domestic aviation to revive the commercial aviation sector. Industry experts are of the opinion that this is the perfect time to consider and bring aviation reforms and pass the industry’s long pending demands.

Speaking at the Bird Group Leadership Initiative online seminar on COVID - 2020 and Beyond, Ajay Singh, CMD, SpiceJet said aviation is the most impacted industry in the world and in India, and revenues from the aviation industry have come to "zero" across the world. “This lockdown period is an opportunity for the aviation industry as we can find a structural reform which we have been looking since years. Always reforms take place when there is a disaster. Amongst these reforms getting Air Turbine Fuel under GST is a long pending request. We should see how we can increase the Indian aviation footprints in this region. Secondly, the whole structure of airports and airport concessions should be relooked at. Today, the whole structure increases cost of aviation and overburdens the air passengers instead of reducing the costs. Airport infrastructure charges as of today is very expensive which should be reduced,” he added. 

He further said: “If we want to create global airlines in India and develop India as a global aviation hub, then this is the right time to relook at it. On a long term, we need to ensure ATF under GST and we should try to develop our own technologies and not pay exorbitantly for these technologies. This will surely reduce cost.”

He also said that governments throughout the world are trying to ensure that airlines don't collapse. “Airlines in India need short term support from government, we are talking to them on a daily basis," Singh added.

There were also speculations that if the industry restarts, there will be a social distancing in airlines with keeping one seat empty. Despite this being a logical idea, this will further increase the air travel cost and doesn’t seem viable.

Speaking about the importance to restart commercial aviation, Sanat Kaul, Chairman, International Foundation for Aviation, Aerospace & Drones (IFFAAD) said, “The aviation sector should be restarted at least in the domestic sectors under testing phase. This will at least bring aviation back on track. The issues on airport concession which is increasing the aviation cost should be seriously looked at. The opening of commercial aviation should be a priority. As far as international aviation, there should be caution and that will take time. Also keeping one seat empty in each row is not a viable option. Instead, keeping mouth and nose covered at all time and no serving of food or drink should be implemented.”

One of the stalwarts of the tourism, aviation and railways, Ashwani Lohani, Former CMD, Air India and For Chairman, Railway Board was a part of the panel discussion who opined that every state and also the Ministry of Tourism should push domestic tourism at this moment.

Speaking about tourism strategy, Lohani said, ““It is clear that there will be a lot of apprehensions when it comes to travel. We don’t know as of now how things will pan out. We have in the past always spoken about domestic tourism as the mainstay but have not focused aggressively. At this point, the Ministry of Tourism should discuss with all the state tourism and set domestic tourism as the priority sector. We need to come up with simple action plans to execute this rather than complex plans by hiring expensive consultants.” 

Speaking about the aviation sector, he further said, “Airlines have always been suffering and has a lot of issues and constraints. With the plans to start airlines with social distancing will lead to a steep increase in airline ticket pricing. For airlines, we need to come up with a strategy where these prices don’t go up steeply and also the airline at least break evens the operational costs.”

Etihad Airways (Etihad) will temporarily suspend all flights to, from, and via Abu Dhabi following a decision by the National Emergency Crisis and Disaster Management Authority, and the General Civil Aviation Authority (GCAA), to suspend all inbound, outbound, and transit passenger flights in the UAE. This decision has been made to limit the spread of the COVID-19 novel coronavirus and to protect citizens, residents, and international travellers.

The suspension of flights to and from Abu Dhabi International Airport will commence at 23:59 (UAE local time) on Wednesday March 25, and will last for an initial 14 days, subject to further directives by the relevant authorities. Cargo and emergency evacuation flights are exempt and will continue.

Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group, said, “These are unprecedented times and unprecedented decisions are being made by governments, authorities and companies, including Etihad, to contain the spread of the coronavirus and to help minimise its effects around the world. We stand with our loyal customers, who are having to endure disruption and inconvenience to their travel and their daily lives, and we dedicate all our efforts and resources to ensuring we do all we can to assist them with their travel planning during this challenging period. As the national airline, we stand in full support of the UAE government’s decision and are confident that we’re well prepared to weather the commercial and operational impact this suspension will have on our services.”

Etihad Airways continues to follow UAE and international government and regulatory authority directives and is applying a contingency plan to assist affected customers. The airline will announce the resumption of services through its usual channels once restrictions are lifted.

 

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