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Lockdown impact on tourism industry

Lockdown impact on tourism industry

No option but to turn to Gandhigiri over lack of support: TAAI to government

Tourism

May 19, 2020

/ By
Varsha Singh /
Mumbai

Tourism industry is at a standstill for the past three months

Though tourism has been the worst hit sector due to the coronavirus pandemic, the government has so far failed to provide any succour to the largest employment generator in the country.

The Travel Agents Association of India (TAAI) plans to launch direct action against the government for its failure to provide any relief to the tourism industry which has been the worst affected due to the coronavirus pandemic. In a memorandum submitted to several Indian ministers the organisation has criticised the way the government has completely ignored the travel industry that provides direct employment to over 12 pc of the workforce in India.

“We regret to note that over the last two months not one relief or urgent survival support has been provided to the travel agents and tour operators. You are aware that our trade provides direct employment to over 12 pc of the workforce in India. The Hon.’able Prime Ministerji has announced a package of INR 20 trillion, but the head of task force, the Hon. Finance Minister has neglected us and No Relief to us is seen,” says the letter to the central government.

Founded in 1951, TAAI is India’s oldest and largest travel tourism association and has over 2,500 travel companies as its members. It further stated that it was in a state of shock when no economic package was announced for them even after several pleas. They said it had left the travel agents and tour operators in the country dejected.

The tourism industry accounts for USD 247 billion or nearly 10 pc of India’s GDP and employs over 55 million persons, across the entire spectrum of hotels, transport, restaurants, entertainment and souvenirs. While there are scores of large companies involved in the business – running hotels, tour operators and transport providers, the tourism industry is hopelessly fragmented with an overwhelming majority of the business being done by small and medium enterprises.

Intermediaries of tourism industry like tour operators and travel agents are amongst the hardest hit by the lockdown, with many staring at bankruptcy, even though some are trying to keep the chin up even as their business takes a beating that few can handle.

“We are not only in despair but also in a state of shock. The trade was so confident that under the leadership of Modi ji, we would be nurtured and protected. The Hon.’able PM had directed not to retrench staff and to pay full salaries. We blindly followed his instructions in spite of our incomes being zero. There was an assurance of support to all citizens and all organisations during these times,” says the letter.

In a thinly-veiled warning, TAAI appealed to the government to consider its requests for survival, failing which it will adopt the Gandhian way of protest. “We are the ambassadors of tourism in the world and all we request is minor assistance during these testing times on basis of humanity and not any political or economical crisis. We are hardworking and do not shy away from striving. We are not looking for charity,’’ the association said.

“We …are still confident that your respective ministries shall immediately consider of our basic requests of survival, else we shall have no option but to take steps like that of Mahatma Gandhi ji, which shall be detrimental to your government,” it added.

 

Jyoti Mayal, president TAAI vice chairperson FAITH

Media India Group spoke to Jyoti Mayal, president TAAI vice chairperson Federation of Associations in Indian Tourism Hospitality (FAITH) about the current situation of the travel industry and the next step of action.

When did you first approach the government for help?

We first approached the government much before the lockdown. When we had seen the pandemic spread through countries and when flights to and from some countries began to be cancelled as we expected the situation to worsen in India as usual. When the lockdown was announced, we realised soon that the situation would not improve for a long time. Our letters were with the government in the first week of the lockdown itself and what we are asking for is not something out of the box, we did not ask for crores of rupees.

What has been the total loss for the business so far?

It is INR 10 trillion and the unemployment could be 36 million, counting both direct and indirect jobs. The industry is spread between aviation, hotels, travel, transport, shopping etc. Over the last three months, we have had zero business. March to July is the peak time for our business. Our annual air ticketing is about INR 900 billion and of this, about INR 450 billion or 50 pc comes in these three months. So this entire business hasn’t happened and this is the biggest loss we have ever seen.

What did the government tell you in your first meeting?

We have had several meetings with various ministries. We also have had political meetings with the vice president of the Bharatiya Janata Party. But I must say one thing. The ministry of tourism has really stood by us and they really worked as hard as we did to push for our case. Now, I don’t know how seriously other ministries or the Prime Minister’s Office takes them. The tourism ministry has done its job, now it is for the finance minister or the prime minister to decide if tourism is important or not and if they think it is not, then there is no reason for tourism ministry to even exist.

One of your demands is that the government ought to pay 33 pc of the salary of employees for the next six months. Can you elaborate?

Yes, it is one of our suggestions for the government. We have been following the government’s appeal to not sack any employees and continue to pay their salaries. We also don’t want to let go of any of our staff as they are more like our family. Our suggestion was that we could give 33 pc of the salary, while the staff gives up 33 pc and the government pays 33 pc. So, it was a very practical suggestion and we were quite hopeful that it would be accepted, because most of the tourism companies are small companies and it is not as if they are sitting on a pile of cash that they can rely upon in time of this crisis. The government, on the other hand, has a huge pile of cash in ESIC, which is anyway the contribution of employees and the employers, so they could pay from that.

But the government has not provided cash relief to any company under the economic package, so how hopeful are you they would listen to you?

Of course, I am not saying that the government should not give to the people below the poverty line and give to us, instead. But the package of INR 20 trillion that they are talking of, at least some of it should have been used for the tourism industry also. The first time when the prime minister had addressed the nation, he had named five pillars and tourism was one of them. So, it was very encouraging for us to hear that and we were really hopeful that the government would do something. It is not that everyone in this field is well off and employed. There are many self-employed persons as well such as tourist guides, taxi drivers and handicraft making artisans.

The finance minister has not announced any cash relief to anyone and has earmarked a large sum towards agriculture and infrastructure, which is actually a good thing as it is the improved infrastructure that has led to a boom in tourism. But if we fail to survive, then there is little that you can do with infrastructure, however good it may be.

Even when the situation improves and airlines want to start flying again and destinations welcome tourists once more, how will any tourist travel? So, we need to sustain ourselves until then and we will keep on having our basic expenses such as rent or electricity for our offices. The government deferring GST filing for a few months is of no use to us as there is no question of any GST if we don’t do any business. The government ne to take steps that will help create fresh demand for tourism like tax holiday etc. If not, the industry itself collapses.

How many job losses have you already seen?

So far, the members had been hopeful of getting some assistance from the government and had kept going despite the tough times. However, since yesterday, I have been very worried that a lot our members would close down or at least retrench a lot of people. It would have a cascading effect and a lot of companies and people right across the value chain could be affected.

How long would you wait for the government to act?

I don’t think we should be waiting anymore, we have to move on and try to do some business. As some destinations have opened up, the airlines have written to the government to allow them to restart operations. All of this could lead to resumption of some business, even if it would be very slow in the beginning. So we are hoping that the moment this lockdown is over, people will start moving again, especially the younger people who are aware of the new norms to be maintained and rules like social distancing to be respected. So, we can foresee a gradual return of business, notably in areas like adventure travel, honeymoon and even MICE for that matter. If this restarts, then others would follow later.