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Travel and Tourism: Survive, Revive and Thrive in Times of COVID-19

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Travel and Tourism

Survive, revive and thrive in times of COVID-19

June 2020
Contents
FICCI Foreword 3

Grant Thornton in India Foreword 4

Global travel and tourism industry: An overview 5

Indian travel and tourism industry 8

Indian Government’s key policies to boost the sector (pre-COVID-19) 14

Impact of COVID-19 pandemic on the travel and tourism industry 16

Relief measures and recommendations by FICCI to the Government of India 20

Government relief packages in other countries 29

02 Industry 4.0: Transforming the manufacturing landscape


FICCI Foreword

The travel and tourism industry in


India is looking at up to 40 million
job losses (both direct and indirect)
and about USD 17 billion in revenue
loss in the next one year.

The COVID-19 pandemic has resulted in the loss of lives and The government has also leveraged e-visa capabilities and
livelihood all across the globe. Industries across the spectrum extended it to 169 countries making it easier for individuals to
have been impacted by the pandemic, the travel and tourism visit our country.
industry has felt maximum impact due to grounding of planes,
closure of railways, hotels and other establishments. Looking ahead, domestic tourism will be the way forward
as inbound tourism will take longer to revive and open up.
The travel and tourism industry has proven its importance as Although the Indian travel and tourism industry has not
an economic growth engine for the world economy. For nine received much support from the recent announcements on
years consecutively, the industry’s growth rate has surpassed the economic relief package by the government, it should
the growth rate of the global economy. In 2019, the industry be considered as a priority sector. In order to achieve this,
grew at 3.5% compared to global GDP growth rate of 2.5%. government, industry and institutions must make collaborative
Accounting for 10.3% of total GDP, the industry contributed efforts to create a supportive ecosystem for tourism.
USD 8.9 trillion to the global GDP and created approximately
330 million jobs, one in 10 that year. We are happy that a National Tourism Taskforce (NTF) has
been formed by the Ministry of Tourism, Government of India.
The tourism sector makes a significant impact on the economy It will play a major role in the survival and revival of the Indian
of our country. The data by World Travel and Tourism Council travel and tourism industry so that it can once again be the
(WTTC) reveals that in 2019 the tourism industry in India torch bearer for the Indian economy.
contributed INR 194 billion to India’s GDP. The industry also
supported 87.5 million jobs, 12.75% of total employment in We are pleased to present the FICCI - Grant Thornton report,
2018-19. Due to the impact of the pandemic on the global Travel and Tourism: Survive, revive and thrive in times of
economy, the WTTC is estimating losses of up to USD 2.7 COVID-19, which looks at the impact of this crisis and the
trillion with up to 100 million jobs at risk. The travel and tourism recommendations for survival and revival. This document will
industry in India is looking at up to 40 million job losses (both facilitate a better understanding of the challenges faced by
direct and indirect) and about USD 17 billion in revenue loss in the industry and the opportunities for revival, both by the
the next one year. government and private sector.

All across the world, countries are looking at tourism as the Dr. Jyotsna Suri
main driver to revive their economy. The central government Past President, FICCI
plays an important role in developing a strong visitor economy Chairperson, FICCI Tourism Committee
which is evident from the fact that the Ministry of Tourism has Chairperson and Managing Director,
also undertaken a slew of initiatives, such as the Incredible The Lalit Suri Hospitality Group
India 2.0 campaign focusing on niche tourism products
Mr. Dilip Chenoy
including wellness and adventure tourism, as well as investment
Secretary General, FICCI
into the industry through schemes, such as PRASHAD and
Swadesh Darshan, which have proven to be successful in
increasing the number of foreign and domestic visitors in India.

Travel and Tourism - Survive, revive and thrive in times of COVID-19 03


Grant Thornton in India
Foreword
To minimise the impact of COVID-19 on the
industry as well as the livelihoods of millions
dependent on it, the government should
introduce short-term relief measures and
encourage collaboration and participation from
all stakeholders across the industry.
For many years, the travel and tourism sector has maintained sectors. While the Government of India’s (GoI) mandatory
its position as an important growth engine and job creator for lockdown is being rightly lauded as the one of the best
the world economy. According to World Travel and Tourism containment measures globally, the industry’s losses due to
Council (WTTC), the sector grew at a rate of 3.5% contributing it will be humongous, not only until the country reaches its
USD 8.9 trillion to world GDP and one in every 10 jobs was apex of infections but during the recovery phase too. Some
created by the sector totalling up to approximately 330 companies in this space have already announced layoffs
million jobs worldwide. India’s travel and tourism sector had besides putting their hiring plans on hold.
been growing consistently, generating 87.5 million jobs and
adding USD 194 billion to the country’s GDP in 2019. Diverse Winston Churchill once said, “Never let a good crisis go to
landscape coupled with multiple tourism offerings, ranging waste.” The aim to is to help the industry survive these tough
from wellness to adventure, and a spike in the adoption of times, and come through it successfully. For that, everyone,
niche experiences augmented domestic as well as foreign including the government, banks, companies and employees,
inbound tourism. In 2019, India recorded 10.8 million foreign will need to work collaboratively to ensure that the consumer
tourist arrivals, a growth of 3.2% from 2018, earning USD 29.9 sentiment becomes positive once the lockdown restrictions are
billion in foreign exchange earnings. removed.

While industries and sectors across the spectrum have been Rohit Arora
severely impacted by the novel coronavirus, the travel and Chartered Accountant,
tourism sector has been worst hit. Experts at the WTTC estimate Gurugram
travel and tourism GDP to be eroded by approximately USD 2.7
trillion in 2020 with up to 100.8 million jobs around the world at
risk.

To tide over the pandemic and minimise its impact on the


livelihoods of millions, besides announcing short-term relief
measures, governments across the world must work in close
collaboration with industry experts from both private and third

04 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Global travel and tourism
industry: An overview

Travel and Tourism - Survive, revive and thrive in times of COVID-19 05


The global travel and tourism industry is a key contributor to the global economy,
accounting for USD 8.9 trillion, translating into 10.3% of global GDP

Growth rate and employment Reinforcing role in global


opportunities economic growth
The significance of the travel and tourism industry can be With its continued resilience against socio-economic
witnessed by the trend in its growth rate of 3.5% outpacing disturbances and other events, the travel and tourism
the growth rate of global GDP of 2.5% as of 2019. For nine industry contributed USD 8.9 trillion in total to the global GDP,
consecutive years, as a result of higher disposable incomes, accounting for nearly 10.3% of the total figure in 2019.
technological advances, affordable travel and better work-
life balance, amongst others, the travel and tourism industry Globally, the sector’s direct contribution to GDP through
has sustained its growth, emerging as one of the leading spends on business and leisure activities as well as government
contributors to the global economy. spending, stood at approximately USD 2.9 trillion in 2019.
Although Europe was home to half the countries on the list of
Importance of travel and tourism in global growth the top 10 contributors, the United States of America’s travel
and tourism industry’s direct contribution was the highest,
7.0% 6.5%
amounting to approximately USD 581 billion, followed by China
6.0%
5.0% at USD 403 billion. India ranked 8th with a total direct travel
5.0% 4.4% 4.2% 4.0% 4.1%
3.5%
and tourism contribution of approximately USD 108 billion.
4.0% 3.3% 3.2%
3.0%
3.1%
Countries around the world rely heavily on the travel and
3.1% 2.8% 2.8% 3.0%
2.0% 2.5% 2.7% 2.5% 2.5% tourism industry to propel growth. Coined as the ‘Las Vegas
1.0% of Asia’, Macau topped the list with the highest share of GDP
0.0% through direct tourism with over half its GDP coming from the
2011 2012 2013 2014 2015 2016 2017 2018 2019
travel and tourism industry at 50.2%. Maldives was second
Annual growth % T&T contribution to GDP in line with 32.5% of GDP share generated by the sector.
Annual growth % World GDP
Other popular holiday destinations, such as Seychelles, the
Bahamas and Belize, were also amongst the top few with direct
Serving as a catalyst for further global growth, the travel and contributions to GDP standing at 26.4%, 19.5% and 15.5%,
tourism industry not only impacts millions of individuals but respectively.
also has the power to transform communities. Accounting for
more than one-third of the global services trade, its growth
rate facilitates the creation of more and better jobs requiring a
diverse portfolio of skills and capabilities.

In 2019, the travel and tourism industry created


approximately 330 million jobs, accounting for
nearly one-tenth of the total jobs created worldwide.

06 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Of the total contribution of USD 8.9 trillion, two-thirds of the
travel and tourism sector’s GDP contribution is via indirect or
induced factors such as capital investment into the sector by
other sectors, government spending to aid growth of the sector
(at a national, regional or local scale) as well as spending by
individuals who are directly or indirectly employed in the sector.
Contribution of direct expenses to the travel and tourism
industry

10,000
8,810.96
9,000
7,674.79 7,650.17 8,900.00
8,000 7,094.29
7,000 6,259.57 6,108.56 7,444.04 8,240.74
6,000 1,629.02 7,432.19
6,925.29
5,000 1,809.37 5,803.03
4,000
2,381.10 2,750.65
3,000 2,207.37 2,388.31
1,629.02 1,928.47 1,911.51
2,000 2,892.94
2,157.06 2,304.81 2,320.93 2,567.88
1,000 1,809.37 1,794.88
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
All figures are in USD billion Direct contribution Total contribution

A sector that attracts


consistent investment
Historically, the travel and tourism industry has managed to
attract all types of investors. The investments in this industry
constituted nearly 4.3% of the total global investments in 2019.
In absolute terms, the figure stood at USD 948 billion.

The United States of America invested USD 209 billion in its


travel and tourism industry, followed by China at USD 170
billion in 2019. India secured a podium finish in the same
year and ranked third, with a capital investment of USD 51.6
billion. Collectively, the top three countries accounted for
approximately 45% of global investments into the travel and
tourism industry.

Travel and Tourism - Survive, revive and thrive in times of COVID-19 07


India’s travel and
tourism industry

08 Travel and Tourism - Survive, revive and thrive in times of COVID-19


India was ranked 34th in the Travel and Tourism Competitiveness Report 2019
published by World Economic Forum, up six positions from 40th in 2017.

The travel and tourism Increased domestic travel and


industry provided 87.5 million spends
jobs and accounted for 12.75% Domestic travellers drove the travel and tourism sector in India
of the total jobs created in the inwas2019; domestic spend in the sector stood at 83%. This share
expected to reach 89% by 2028, driven by an increase in
country in 2019. disposable incomes and more leisure time at hand.
Contribution to T&T GDP by domestic and foreign travellers
India, with its geographically and culturally vast landscape,
attracts travellers for a multitude of reasons - from business to
2019 2028 (expected)
leisure. India is also home to 38 UNESCO World Heritage sites.

To boost both foreign and domestic travel, the government 11.15%


17%
has introduced several schemes, such as Swadesh Darshan
Scheme, Pilgrimage Rejuvenation and Spiritual Heritage
Augmentation Drive (PRASHAD) and Adopt a Heritage. The main
objective behind these schemes is to not only increase footfall,
but enhance tourist experience and employment opportunities
83% 88.85%
in a sustainable way.

The government’s efforts to focus on tourism is yielding results;


India recorded over 10.8 million foreign tourist arrivals into Domestic spending Foreign visitor spending
the country in 2019, a 3.2% y-o-y growth, and accounted for
approximately USD 29.9 billion in foreign exchange earnings. The growth in spends on domestic tourism from USD 131 billion
in 2012 to approximately USD 200 billion in 2018 was expected
Growing at a rate higher than the global travel and tourism to double to approximately USD 406 billion by 2028, implying a
industry (3.5%), at 4.9%, India’s travel and tourism industry CAGR of 7.3% between 2012 and 2028.
contributed USD 194 billion to the Indian economy in 2019
which helped it gain 10th spot globally, in terms of contribution Growth in domestic expenditure
of the to the global industry GDP. The Indian travel and Domestic expenditure on tourism (USD billions)
tourism industry was expected to witness an annual growth 500
rate of 6.9% during 2019-2028 to reach USD 460 billion,
400
approximately 9.9% of India’s GDP in 2028. 406
300

With a population of more than 1.3 billion people and an 200


199
unemployment rate of 7.8%, this industry holds the potential to 100 140 150 164 179 186
131
provide livelihood to countless people, who in turn can help the
0
industry scale new heights. 2012 2013 2014 2015 2016 2017 2018 2028
(expected)
Expenditure

Travel and Tourism - Survive, revive and thrive in times of COVID-19 09


India’s top domestic travel destinations
The contribution of domestic travel to Indian travel and tourism Although Gujarat captured only 2.9% of the domestic tourist
sector has been unparalleled for the last two decades, growing market, the state witnessed a huge increase of 12.5% over
almost nine-folds. In a bid to accelerate the growth momentum, 2017, owing to the inauguration of the Statue of Unity in 2018
the central government and various state governments have resulting in a revenue of USD 11.8 million.
made consistent investments into various tourist hubs across
the nation. Andhra Pradesh gained a steady increase in domestic travellers
too, accounting for approximately 18% in 2017. This increase
In 2018, Tamil Nadu secured the pole position with the largest can be attributed to religious tourism, better air connectivity
share of domestic travellers (386 million people) visiting the and tourist facilities provided by the state government. The
state accounting for 20.8% of total domestic travel. This was state also has many heritage sites, which attract not only
a y-o-y increase of 11.84% from 2017. Uttar Pradesh and international but domestic tourists too.
Karnataka were next with approximately 285 million and 214
million visitors, respectively. Uttar Pradesh was the largest While other states have increased their yearly domestic visit
gainer y-o-y, growing total domestic visitors by over 21% as figures in double digits, states, such as Telangana, West
compared with 2017. Bengal, Madhya Pradesh and Rajasthan, showed single digit
y-o-y growth of 9%, 7.5%, 7.6% and 9.4%, respectively.

Top 10 Indian states in domestic tourist footfall (in million)

Uttar Pradesh
Rajasthan

285.08 15.4%
50.24 2.7% Madhya Pradesh
Gujarat
10 2 83.97 4.5%
54.37 2.9%
9 8 7 West Bengal
Maharashtra

5
119.19 6.4% 85.66 4.6%
6
Karnataka
Andhra Pradesh Telangana
3 4
214.31 11.6%
Tamil Nadu 194.77 10.5% 92.88 5.0%
1

385.91 20.8%

10 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Investment in infrastructure Growth in demand
• USD 863.60 million sanctioned to develop • Increasing share of millennial travellers
77 projects across 15 themed circuits pan trading in destination-based travel for
India under the Swadesh Darshan scheme experience-based travel
• USD 120.19 million sanctioned to develop • Government initiatives, including Incredible
51 sites across 28 states in the country India and Dekho Apna Desh, to boost
under the Pilgrimage, Rejuvination And domestic travel
Spiritual, Heritage Augmentation Drive • Growing popularity of niche tourism
(PRASHAD) including medical and cruise tourism
• USD 7 million sanctioned by the Ministry amongst others
of Tourism to support central agencies to • Increased per capita earning slated to
develop potential destinations under their reach USD 3277 by 2024 resulting in higher
purview household incomes
• Airport Authority of India to invest USD
2.5 billion over 2019-2020 to upgrade
airport infrastructure and increase regional
connectivity

Growth of travel
and tourism in India

Enabling government policies Favourable fiscal conditions


• E-visa facilities have been extended to • 100% FDI in travel and tourism sectors
visitors from 169 countries under five sub- under automatic route
categories • Cumulative capital investment of USD 13
• Draft national tourism policy to aid billion until June 2019
collaboration between the Union and state • Several international players looking to
minister of tourism to develop and promote penetrate the Indian market
India to domestic and foreign travellers alike • International players with existing presence
• Web-based public service delivery system looking to increase market presence through
to allow applicants to check their travel and further investment in their India portfolio
tourism project applications online in real- • Reduction of GST tax slabs for various
time accommodation segments from 18% to 12%
and 28% to 18%, respectively

Travel and Tourism - Survive, revive and thrive in times of COVID-19 11


Driving Indian tourism
The Indian travel and tourism industry is expected to be valued at USD 460 billion by 2028 (from USD 194 billion in 2019),
accounting for 9.9% of India’s GDP and attracting multiple stakeholders, both domestic and international to invest in its growth.

Investment in infrastructure Favourable fiscal conditions


To promote India as a 365-day destination, the government Until June 2019, the travel and tourism industry had collectively
initiated two schemes, Swadesh Darshan and PRASHAD, to raised USD 13 billion in capital investment.
boost the tourism infrastructure in the country.
India’s FDI policy allows for 100% investments through the
Under Swadesh Darshan, 15 themed circuits were outlined to automatic route for all travel and tourism sectors whether it
be developed into 77 projects. A cumulative sum of USD 863.6 be hotel construction, road infrastructure or tourist activities.
million was sanctioned, of which USD 526 million was released The year also saw numerous international players with a slim
as of December 2019 for the development of these circuits. presence in India shore up their India portfolio.
• Airbnb invested USD 75 million in OYO to leverage Indian
Under the PRASHAD scheme, a total of 51 sites were identified
users
across 28 states. Since initiation, USD 120.2 million has been
• Radisson Hotel Group announced plans to double its India
sanctioned for the development of 28 projects in 17 states. Until
portfolio from 94 to 200 by 2023
December 2019, USD 72.3 million has been released for the
• Hilton Group announced its plans to add an additional 18
same.
hotels in India by 2021
The Ministry of Tourism, India, has also been collaborating • Louvre Hotels Group acquired the Sarovar Hotels and
with and supporting multiple central agencies, such as the Resorts network in 2017 in order to further penetrate the
Archaeological Survey of India, the Port Trust of India and the Indian hotel industry. They plan to increase their business in
India Tourism Development Corporation, to develop potential India to 10-15 hotels by 2021.
destinations under their purview to increase tourism.
India has entered into 47 Memorandum of Understanding
To facilitate the showcasing of regional tourism, the Ministry of (MoUs) for bilateral tourism cooperation agreements with
Tourism released a total of INR 74.7 million to multiple states countries, including Maldives, Finland, Korea, Qatar and
and union territories for the purpose of fairs, festivals and/or Paraguay, to encourage free trade agreements (FTA) and
tourism-related events. subsequently Foreign Exchange Earnings (FEE) from these
countries through a mutual sharing of data and knowledge.
With continued efforts on increasing tourism, the Airport
Authority of India will be spending USD 2.5 billion to spruce After the introduction of Goods and Services Tax in 2017,
up airport infrastructure and provide regional connectivity heavy taxes on accommodation curbed travellers’ enthusiasm.
to under-served regions in India. Capital investments into the However, the GST council altered tax slabs for room tariffs.
Indian travel and tourism sector are expected to reach USD GST on room tariffs of over INR 7,500 was reduced from 28%
95.3 billion by 2028. to 18%, while those between INR 1,000 and INR 7,500 was
reduced from 18% to 12%. Room tariffs of below INR 1,000 do
not attract GST.

12 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Enabling government policies and Growth in demand
measures With an ever increasing millennial population, higher
Strict visa norms hindered India from reaching its true foreign disposable incomes (per capita earning expected to increase
travel influx potential. A facilitative visa regime increased India’s to USD 3277 in 2028 from USD 2036 in 2018) and more
inbound tourism by extending the e-visa facility to the nationals affordable options for both travel and accommodation, trends
of 169 countries under five sub-categories. In 2019, 2.93 million in tourism have shifted from destination-based tourism to
foreign tourists availed the e-visa services, a y-o-y growth of experience-based tourism.
23.6%.
Shifting its focus from the generic Incredible India campaign,
Visa fees were also rationalised with different fees for lean and Ministry of Tourism launched the Incredible India 2.0 campaign
peak seasons to overcome seasonality challenges. to boost specific products within niche tourism such as cruises,
adventure tourism, wellness and sports tourism amongst others.
The draft National Tourism Policy 2015 was envisaged with an
objective to increase India’s foreign arrivals and boost tourism
in the country. The policy outlined the importance of robust
core (air, road, rail and water) and tourism infrastructure
(Swadesh Darshan, PRASHAD, etc.) in addition to enhancing
the positioning of India as a safe, secure and clean holiday
destination besides creating employment and increasing
community participation.

The Ministry of Tourism also launched a 24x7 toll-free tourist


helpline available in 12 languages to support travellers in
obtaining information and lodging complaints. In addition,
certain states have instated Tourist Police to support travellers
and ensure their safety.

In order to educate stakeholders in the tourism industry, the


Ministry of Tourism signed an MoU with the Eco Tourism Society
of India to conduct workshops on sustainable and responsible
tourism practices.

Travel and Tourism - Survive, revive and thrive in times of COVID-19 13


Indian Government’s
key policies to boost
the sector
(pre-COVID-19)

14 Travel and Tourism - Survive, revive and thrive in times of COVID-19


The government has been consistently providing support to the travel and tourism industry. The Ministry of Tourism formulates
all national policies and programmes to aid and promote tourism in the country. In the last five years, the Ministry of Tourism has
undertaken several initiatives to boost the sector. Other ministries, such as Ministry of Civil Aviation, Ministry of Railways, Ministry
of Road Transport, work alongside the Ministry of Tourism.

Key initiatives to enable the sector’s growth by GoI include:

Ministry Key initiatives/policies


Ministry of Tourism • E-Visa extended to 169 countries
• Incredible India 2.0 campaign focusing on niche tourism in order to promote India as a 365-day destination to
overcome seasonality challenges
• Dekho Apna Desh campaign to incentivise frequent domestic travel within one year
• 100% FDI under automatic route for travel and tourism-related activities, including hotel construction projects
• USD 983 million sanctioned for PRASHAD and Swadesh Darshan schemes
• Key focus on promoting North Eastern states as well as Jammu and Kashmir in the National Tourism Policy
• Generating adequate manpower and developing necessary skills by providing training and professional
education at institutes across the country
• Toll-free, 24x7 helpline for tourists in 12 languages
Ministry of Civil Aviation • Regional connectivity scheme UDAN (Ude Desh Ka Aam Nagrik) to make flights available at affordable prices
through concessions by central and state governments as well as airport operators to improve connectivity. 8
out of 46 proposed routes have been operationalised
• Encouraging the use of water aerodromes and helicopters in tourism
• Nabh Nirman: construction of 19 green-field airports with an investment of over USD 14.3 billion over the next 5
years
• Launch of AirSewa to address customer grievances and disseminate real-time data to enhance travel experience
Ministry of Railways • 100% FDI in railways infrastructure
• Railway operations made more environmental-friendly with adoption of cleaner technology and afforestation of
vacant railway land
• National Rail and Transport Institute to improve the quality of training of railway employees
• Indian Railway Catering and Tourism Corporation (IRCTC) offering specialised train tours catering to various
types of travellers
• Agreement between Indian railways and UNESCO to connect all eight state capitals in the North East with
countries like Bhutan, Myanmar, Bangladesh and Nepal
Ministry of Shipping • E-visa facilities at Mumbai, Mormugao, Mangalore, Kochi and Chennai ports have been set-up to ease
immigration
• Biometric requirements have been waived off for cruise passengers arriving at the aforementioned five ports
with e-visa
• Action plan drafted for development of cruise tourism in India
• Development of 78 lighthouses under PPE
• Modernisation of Indian ports under the Sagarmala project
• Development of river cruise circuits
Ministry of Road • 100% FDI in road and highways sector allowed under automatic route
Transport and Highways • Launch of Bharatmala Pariyojna to optimise efficiency of freight and passenger movement and improve the
quality of 34,800 kms of road, with focus on improving connectivity in the North East
• Development of wayside amenities to provide travel comfort to highway users
Ministry of Culture • Launched ‘Adopt a Heritage’ project to engage public and private sector companies as well as individuals to
create and maintain state-of-the-art facilities at various heritage sites and monuments
• 100 monuments protected by the Archaeological Survey of India are being developed and maintained under
the Adarsh Samarak scheme with the objective of improving tourist experience, especially for the physically
challenged
Ministry of Environment, • Collaborated with the Ministry of Tourism to develop policy on niche tourism such as ecotourism and wildlife
Forest and Climate tourism
Change • Launch of the National Mission for Green India (GIM) to increase forest cover, density and conserve biodiversity

Travel and Tourism - Survive, revive and thrive in times of COVID-19 15


Impact of COVID-19
pandemic on the travel
and tourism industry

16 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Key highlights
• The global travel and tourism industry is estimated to lose USD 2.7 trillion in 2020 with 100 million jobs at risk
• The India travel and tourism industry is facing an overall loss of USD 16.7 billion with up to 50 million jobs (both direct and
indirect) at risk
• The aviation sector globally has been impacted the most facing losses up to USD 314 billion in the current scenario. Up to
25 million jobs are at risk in the global aviation market
• In India, the aviation sector is looking at an estimated loss of USD 11.2 billion with up to 2.9 million jobs at risk
• The Indian hotel industry has also been hit by the pandemic; estimated losses for 2020 increased to USD 6.3 billion and
may reach USD 14 billion depending on the persistence of the lockdown. This includes hotels and accommodation in both
organised and unorganised segments

COVID-19 has disrupted international travel trade and country, 40-50 million jobs will be at risk in 2020, both directly
supply chains in an unprecedented way. Several countries and indirectly employed in the industry.
have suspended tourist and business visas and banned both
domestic and international air travel, bringing economies to a The Ministry of Tourism has constituted a National Tourism
screeching halt. The International Monetary Fund predicts a Taskforce, to be headed by the Minister of State (I/C) for
shrinkage of the global economy by 3% during 2020 due to the Tourism to meet the challenges posed by COVID-19 and will
novel coronavirus. include state tourism ministers, joint secretary level officers
of the concerned central ministries, and representatives from
With many economies yet to hit their infection apexes, experts associations, such as FICCI, CII, ASSOCHAM and WTCII, as
predict economies around the world to shrink in the first quarter well as heads of tourism and hospitality associations.
of 2020, with ripple effects expected to be felt in the following
months. The travel and tourism sector is the worst hit. With large scale cancellation of travel plans by both foreign
and domestic tourists, there has been a drop in both inbound
Of all the segments of the hospitality sector, the Meetings, and outbound tourism of approximately 67% and 52%
Incentives, Conferences and Exhibitions - popularly known as respectively from January to February as compared with the
MICE segment - has been hit the most with major international same period last year.
business events cancelled including Mobile World Congress
(MWC), Google I/O, and Facebook’s F8 event, leading to huge The aviation sector, which contributes 2.4% of Indian GDP, is
economic losses. among the worst affected sectors due to COVID-19. The spread
of the pandemic across the country, in the last two months,
Impact of COVID-19 on the travel and has led to a 47% decline in the passenger traffic. Following
the lockdown in March, airlines have been incurring parking
tourism sector in India charges as nearly 650 planes of Indian carriers are now
The pandemic is estimated to have a debilitating impact on the grounded. These airlines are liable to pay a lump sum amount
Indian travel and tourism sector, which includes hotels, travel of INR 6 million of parking and housing charges. Airlines are
agencies, tour operators, destinations, family entertainment also refraining from increasing prices for the summer season.
venues, restaurants and air, land and sea transportation, According to the Centre of Aviation (CAPA), the Indian aviation
amongst others. Overall, losses are estimated to total up to industry could bear losses up to USD 3.6 billion during April-
USD 16.7 billion. Being a large employment generator for the June 2020 alone.

Travel and Tourism - Survive, revive and thrive in times of COVID-19 17


The travel ban has largely impacted tour operators and travel Various pilgrimage sites, including large temples across the
agencies as the restrictions have not only affected current country, have been closed in the wake of the pandemic.
bookings, but future bookings too. With March and April being Tirumala Venkateswara Temple, the richest Hindu temple
peak season for Indian travellers heading to both domestic has incurred losses of nearly INR 125-130 crore so far. Other
and international destinations, nearly 90% bookings of hotel temples in Tamil Nadu have also incurred losses due to the
and flights have been cancelled for the same period. Among lack of daily offerings. Closure of pilgrimages has also had
these cancellations are cruise bookings for destinations such cascading effects on hotels, homestays, businesses of travel
as Thailand, Singapore and Malaysia. According to the Indian agents as well as floriculturists.
Association of Tour Operators (IATO), the hotel, aviation and
travel sector together may incur losses of about INR 8,500 crore Negative impact on the Indian Railways has also been
due to travel restrictions imposed on foreign tourists by India witnessed ever since the nationwide seizure of rail services
which further puts at risk the survival of smaller to medium across the country. The Indian Railways facilitate the
sized organisations including the jobs of several thousand, if movement of goods as well as passengers. The Indian Railways
not lakhs of individuals. For tour operators and travel agents is expected to witness losses amounting to INR 17 billion due
across the length and breadth of the country, average losses in to COVID-19; almost 13,000 passenger trains have come to a
revenues compared with the same period last year have been standstill.
in the range of 50-80%.

India has a total of 3961 centrally protected sites either under


UNESCO as a world heritage site or the Archeological Survey
of India (ASI). Monuments, such as the Taj Mahal and Agra Fort
in Agra and Qutub Minar in New Delhi, are the highest revenue
earners grossing annually INR 77 crore, INR 34 crore and INR
26 crore, respectively. The livelihoods of approximately 1.75
lakh daily earners, including tour guides, rickshaw pullers,
photographers, etc., have been affected in Agra alone. Tour
guides with licenses from the government are not allowed to
take up alternative jobs, adding to their challenges.

18 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Employment Health
Globally, COVID-19 can result in up to a 30% loss in jobs, with Despite facing serious impact from reduced public demand,
up to 100.8 million jobs in the travel and tourism sector at the Indian hotel chains have also offered several rooms to serve
risk of being affected as per the economic impact from COVID- as makeshift quarantine facilities for the government in
19 report published by the World Travel and Tourism Council. various cities including Delhi and Mumbai.

The travel and tourism sector in India employs around 87.5 In addition, branded hotels have been offering rooms to
million people, directly or indirectly. This pandemic could healthcare workers at discounted rates and providing food
render up to 40-50 million people unemployed, which is up to to affected migrant workers in the country through their
approximately 57% of this sector’s entire workforce. Due to kitchens.
COVID-19, the Indian tourism industry is looking at pan India
bankruptcies, unemployment and closure of businesses. This, however, poses a health risk for the hotel staff working
on the frontlines to provide these services, despite health and
Several hotel businesses and travel operators in India including safety measures in place
Ixigo, MakeMyTrip, OYO, Mariott International, Treebo Hotels,
FabHotels, and Lemon Tree Hotels have announced plans to
reduce senior employee salaries and introduced unpaid leave Events
options in order to cope with the financial impact caused by
the crisis. In light of the pandemic, multiple events, conferences,
conventions and trade shows have been cancelled or
Approximately 8-10% of the total staff strength of the global postponed indefinitely across event categories including
cruise liners comprise Indians and approximately15-20% sport, cultural and geo-political events, impacting not only the
of employees across the branded hotel chains in India are venues but host countries too. Some of the larger events that
contracted or casual staff. With the industry facing financial have borne the brunt of the pandemic include the 2020 Tokyo
woes due to COVID-19, these employees may have to face Olympics, the EURO 2020 football championship, La Tomatina
layoffs. festival in Spain, Dubai Expo 2020 and the 36th ASEAN Summit.
Certain conventions such as the TED2020 have leveraged
The COVID-19 pandemic has also affected the livelihood of technology to move the event online.
workers in the Indian amusement parks that not only hires
80,000 people directly, but also employs 5,000 people
seasonally and indirectly supports various other industries. Due
to the nationwide lockdown and social distancing guidelines
imposed by the government, the main season to generate
revenues for these parks is ruined. Top players apprehend a
downslide in 2020 with losses amounting to approximately INR
11 billion.

The aviation industry in India is also expected to see job


reduction due to global travel restrictions to contain the spread
of COVID-19. The International Air Transport Association (IATA),
the global airlines association, estimates over 2.9 million jobs at
risk in the Indian aviation space and its dependent industries.

Furthermore, domestic airlines, including GoAir and SpiceJet,


have resorted to measures such as ‘leave without pay’ and pilot
layoffs.

Travel and Tourism - Survive, revive and thrive in times of COVID-19 19


Relief measures and
recommendations by
FICCI to the Government
of India

20 Travel and Tourism - Survive, revive and thrive in times of COVID-19


With coronavirus impacting the Indian economy, the travel and tourism industry is
looking at up to 50 million jobs at risk. For the industry to tide over this crisis, several
relief measures have been recommended to the Government of India by FICCI.

Key highlights
• Six-month moratorium to be extended to a minimum 12-month moratorium period on all working capital, principal, interest
payments, loans and overdrafts
• Permit one-time rescheduling of principal/interest dues in line with the estimated cash flows of each project post recovery
from COVID-19 without treating it as restructuring, re-classification/downgrading in asset qualification and requirement
of additional provisioning.
• 12-month waiver of all statutory dues including customs, excise and license fees and increase in insurance premiums
• Stimulus package to provide salary support to businesses
• ESI contribution to be deferred for 12 months. Insurance corpus of ESI should to be used to provide wages to all covered
workers
• Waiver and/or reduction of GST on products offered by the sector for a 12-month period
• Direct cash support for the aviation sector (airlines, ground handling and airports)
• Waiver of parking and landing charges
• Short-term, interest-free or low-interest loans for rebuilding businesses in the form of term loans and working capital loans
• Create a separate tourism fund under the aegis of Ministry of Tourism, accessible to the industry as a collateral free, 10
year loan, with a moratorium of two years and minimal rate of interest to support businesses stabilise in this time of crisis

There is an urgent need to take immediate steps to not only contain the spread of the virus but also to address the key pain areas
of the industry to minimise the impact of the outbreak on the Indian economy and businesses. A combination of monetary, fiscal
and financial market measures is needed to help the businesses and people cope with the crisis. Therefore, to be able to frame
correct actions and policy measures, it is important to understand clearly the specific problems that people and businesses are
currently facing. This alone can enable the government to take appropriate measures.

Measures recommended for the survival and revival of the


travel and tourism sector
• While a six-month moratorium has been granted to the • Export status for foreign exchange earnings for inbound
industry, a minimum 12-month moratorium period is needed tours and hotels
on all working capital, principal, interest payments, loans • A 12-month deferment in the increase of insurance premium
and overdrafts. Collateral and interest-free loans for five related to standard fire and special perils rate for fire, loss of
years for SMEs in the sector to help them sustain and rebuild profits
• A 12-month waiver of all statutory dues with respect to • SGST to be waived off till the situation becomes normal
license fees, property tax and excise fees • Tax rebates by the government for encouraging spending
• Defer GST and advance tax payments at the Central on domestic holidays (for example, LTA) and GST relief
Government level and removal of fees for any upcoming and other incentives for corporates to organise meetings,
licenses, permits and their renewal incentives, conferences and exhibitions (MICE) within the
• Bailout packages to fund and support salaries in the sector country

Travel and Tourism - Survive, revive and thrive in times of COVID-19 21


Regulatory measures • Advise credit rating agencies to maintain last-assigned
ratings over the next six to nine months due to the expected
• Permit one-time rescheduling of principal/interest dues volatility of the business in the short- to medium-term
in line with the estimated cash flows of each project post • Extension of subsidies on Heat-Light-Power (HLP) costs, as
recovery from COVID-19 without treating it as restructuring, HLP is among the largest fixed cost for the sector
re-classification/downgrading in asset qualification and • Waiver/reduction of GST on products offered by the sector
requirement of additional provisioning for one-year period
• Permit sanctioning of additional facilities in the form of • Provision of soft loans/interest subventions/cash
working capital term loan for meeting cash flow mismatches • Incentive/interest subsidies to ensure continuity in business
during the period affected by COVID-19. The tenure of such operations
facility shall be assessed based on the individual project • RBI should re-look at the Foreign Exchange and
cash flows. Such additional facilities to be treated as Management Act with respect to Indian travel companies
standard assets such that they may be able to source and service customers
• In case of projects under implementation, the banks/ who are not based in India for services in third-party
institutions/NBFCs be permitted to extend the Date of countries. This may allow forex remittance into India to
Commencement of Commercial Operations (DCCO) by increase, as margins will reside here, and allow Indian
one year without treating it as restructuring as it would be companies to expand to a bigger base
difficult for promoters to raise funds from other business/
services for project completion.
• Lending to tourism sector to be treated as ‘priority sector
Relief measures requested for
lending’ at least for next one year which will enable access the aviation sector
to bank finance
• Amendments to Master Direction -Reserve Bank of India • Immediate direct cash support to Indian carriers for them
(Relief Measures by banks in areas affected by Natural to meet their fixed costs at least for the period where loss
Calamities) 2018-SCBs to include: of revenues and liquidity is directly attributable to the
– COVID-19 in the definition of natural calamity and permit Government’s directive to cease operation without any
use of this circular for tourism sector reference to the airlines’ cash reserves
– Enabling NBFCs to use this circular (presently only • Minimum 20% contribution towards the total salary bill
applicable to banks) of employees with a gross salary of INR 30,000 or less
– Removing additional provisioning requirement for the per month, currently employed in airlines carrying out
restructured portion of loans under this scheme maintenance and repair work
• 100% waiver of parking and housing charges for the
Policy measures duration of COVID-19 for a minimum of 6 months
• Minimum six-month deferment of EMI on term loans
• Stimulus package to be formed to stabilise and support the • Provide complete tax waiver, not deferment, for two years
sector in the near-term, including a workforce support fund • Soft term loans with 0% interest to meet fixed expenses
to ensure that there are no job losses (salary, wages, utility, maintenance etc), equivalent to 12
• Waiver of all statutory dues such as advance tax, custom months requirement, repayable with a minimum moratorium
duties, excise duties, etc. at central and state level for 12 time.
months • Request for AAI to release Bank Guarantees from all RCS
• Provision of a 12-month corporate tax holiday to travel, UDAN operators. The amount can ensure cash flow for 2
tourism and hospitality sector and deferment of payment of months
all statutory dues, such as custom duties, excise duties, PF • Provide a 12-month moratorium for payments by airlines,
and bank charges, at central and state level for 12 months MROs and other agencies to hanger or factory premises.
• Extension of annual renewal of licenses paid for in 2020 until The deferred amount may be recovered over a period of 24
the end of 2021 without any incremental fee or charges months, after 12 months, without any interest on overdues

22 Travel and Tourism - Survive, revive and thrive in times of COVID-19


• Recommendation to consider deferment of payment of GST • The proposed TCS on sale of overseas packages in the
for the airline industry as airline GST refunds are higher than Finance Bill 2020 can harm the tourism business in India.
the GST due The proposed TCS will not only increase the cost of
packages sold by Indian tour operators, it will also shift all
Relief measures requested for sales of outbound tourism to overseas suppliers, denying the
government of all Income tax and GST revenues. Therefore,
tour operators in order to allow domestic tour operators a level playing field
and a chance to revive their businesses, it is recommended
• Restoration of Service Exports from India Scheme (SEIS) that proposed TCS should be rolled back
scrips for duty credit of 10% to the tourism industry. • Payments of other statutory liabilities by travels agencies
• Extension of Services Export Promotion Council (SEPC) which should be deferred are:
membership to 31st march 2021 – TDS under income tax including salary TDS: INR 1,570
• Finalisation of an aggressive Incredible India marketing plan crore
during lockdown and implementation on opening to drive – PF and ESI deposit including employee contribution: INR
domestic travel in India 446 crore
• Approval of completed forms by Directorate General of
Foreign Trade within 30 days to utilise the cash flow to pay Relief measures requested for
salaries and expenses
• No landing fees for Goa, i.e. charters land for free to
travel agents
encourage flights to come back • Support fund majorly for salaries and establishment costs
• Same ticket prices for foreigners and Indians for entry to through the following:
historical monuments. – Government to contribute 33.33% of take home salaries
to all employees of registered travel agencies.
Relief measures requested for – Government to use funds of ESIC to pay salaries of
employees covered under the scheme.
online travel agents – No deduction of TDS on salaries for employees of the
trade till March 2021
• Short-term, interest-free or low interest loans for rebuilding
– Subsidise electricity by 33.33% to give relief to 53,000+
businesses and immediate transmission to all independent
travel agents, more than 1.3 lakhs tour operators
travel agents, tour operators and online businesses in the
(domestic, inbound, adventure, cruise and outbound),
form of term loans and working capital loans. Besides,
more than 2,700 MICE organisers and 19 lakh plus tourist
existing overdraft limits can be doubled for the industry and
transporters
immediate cash relief to be provided to avoid mass layoffs
• For the revival of travel agencies, a GST holiday for tour • PF contribution to be waived off for all categories of
packages and all reservation services rendered by travel employees for the next 12 months
agents in line with the tax holiday requested for civil aviation • Employees to be allowed to withdraw a fixed sum of INR
and hospitality sectors 10,000 for up to six months from their EPF accounts
• Tax Collected at Source (TCS) exemption for online travel • ESI contribution to be deferred for 12 months. The insurance
aggregators (OTA) in line with the GST holiday. OTAs are corpus of ESI needs to be used now to provide wages to
liable to collect TCS at 1% under GST while remitting all organised workers for all accumulated days from non-
payments to airlines and hotels. Estimated TCS liability for availability of work and the act needs to be amended
the entire OTA sector would be INR 460 crore immediately
• Union Budget 2020 proposed a new TDS levy similar to TCS • Professional tax to be waived for all companies as well as
under the GST law, whereby OTAs are required to withhold employees up to March 2021
1-5% TDS while remitting payments to airlines, hotels etc. • Refunds of cancellations and advances of travel agents
Considering how the industry is heading towards a loss and tour operators from AIRLINES/IATA: MOT and MOCA
year, the proposed provision should be rolled back

Travel and Tourism - Survive, revive and thrive in times of COVID-19 23


immediately advises them to refund. Advances/float • Special package for the survival of heritage hotels
accounts also to be refunded in full immediately as they are • The CSR initiatives for hotels, aviation, travel, tourism entities
of money in float/advances for not issued tickets should be extended to Swatch Bharat, which in the case of
• Billing period for IATA carriers to be extended to 15 days. tourism industry, should include monuments, tourist sites,
MOCA should underwrite these payments to travel agents and other facilities
& tour operators which will be securitised against these
receivables from IATA and low-cost carriers/non-IATA airline
• Complete GST and income tax holiday for tourism, travel
Relief measures requested for
and hospitality industry for period of twelve months: amusement parks
– IT Holiday effective FY2019-20
– Reseller model for air travel agents to be permitted for • Employee State Insurance Corporation to pay the entire
corporates/customers with GST number with the agents wages of the employees of units covered under ESI for the
directly on payment basis since airlines don’t pay on lockdown period. ESI is justified in meeting this commitment
payment/receipt basis and credit GST only on flown of employees as COVID-19 is a medical disaster
basis • Waiver on custom duties on import of spare parts to bring
– Unlock inter-head credit of GST across IGST, CGST, SGST down the repair and maintenance cost
for tour operators. Permanently allow tour operators to • Reduction of effective rate of interest on loans from financial
claim IGST for hotel reservations/other services interstate institutions by 200 basis points in effective interest rate
basis as input credit to claim ITC being charged by financial institutions on term loans,
– Roll back of TCS introduced in Budget 2020 by the working facilities and other facilities with immediate full
finance minister transmission for working capital. This will reduce the burden
– LTA like tax benefit for Indians for two times a year for on cash outflow
domestic and international travel. This will stimulate • Support fund for 12 months on the lines of Mahatma
domestic travel by Indians Gandhi National Rural Employment Guarantee Act
(MNREGA) to support basic salaries with direct transfers to

Relief measures requested for affected employees in the amusement park industry
• Provision of water and electricity to the amusement park
hotels industry for 6 months on concessional and subsidised rates
• Wavier of minimum/fixed cost charges levied by electricity
• GST rates on companies in hospitality should be slashed department (as exempted for industries by the state of
for at least two to three years. Currently, large hotels are Maharashtra, Gujarat, Uttar Pradesh, and Punjab
charged a GST rate between 12-18% based on room rate. • Waive off property tax/non-agriculture tax/gram panchayat
Now that hotels are almost empty, the GST rate should be tax of amusement park/water park/theme park as it is
brought down to 5-6% with immediate effect developed across huge land parcels for a period of 12
• 500 units of electricity per month and water to be provided months
free of charge to companies in the sector. Thereafter, • Lower rate of income tax and early settlement of income tax
subsidised rates can apply on actual consumption and not refunds to enhance cash inflow and to reduce cash outflow
against fixed load • Extend all existing licenses without charges for one year
• Export Promotion Capital Goods (EPCG) scheme to • To make the entry prices economical to attract patrons,
consider grant of extension in export obligation fulfillment complete holiday for 12 months (central and state level)
period by an additional three years (beyond current limit
of six years) for all the licenses expiring during current and
within this and the next financial year, without attracting
any penalty or interest

24 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Relief measures requested for Opportunities for growth in
the ground transport industry the sector
Assistance to tourist bus owners/ Promote niche travel products under the
operators Incredible India 2.0 campaign
• The business of the tourist bus services is severely affected • Yoga and Ayurveda - Promote wellness tourism as a key
due to COVID 19. The bus owners should be supported unique selling product which will gain a lot of attraction in
by the government monetarily, to ensure their survival. the near future
Additionally, the opportunity of increasing inter-state • Religious circuits - Religious circuits is a highly unorganised
pilgrimage tourism is large at this point where new routes travel market. A complete relook is required to formalise
and circuits can be encouraged these offerings into circuits for all faiths. Even the NRI market
• The government should also look to host the inventory of can be tapped for this product, if institutionalised well.
state transport buses in addition to privately owned and Government needs to play a unification role with state,
operated bus tours on a digital booking and payment private players, travel operators and other identified points
platform to increase accessibility as well as reduce crowding of sale, including fin-tech companies. A feasibility study
at ticket windows at bus stations should be conducted to connect the religious sites by modes
of transport such as aerial ropeway and trollies. Rail, bus,
Assistance to taxi service providers and IRCTC need to all work in cohesion for the circuits to be
a success
As of 2020, there are 1.6 million registered cabs/tourists cars in
• Culinary tourism - It is a great opportunity to explore
India. Of the 1.6 million cabs, 1.3 million are driver owned that
variety of cuisines in the country. Focus on creating culinary
have a huge lump-sum to repay via EMI for cars, carrying a
circuits and trails and promote it extensively through digital
cumulative debt burden of around INR 80,000 crores. COVID-
campaigns. Promote local food by partnering with online
19 is going to discourage development of the car model in
restaurant aggregators for showcasing dining in experiences
India, given the liquidity crunch. Government needs to support
of cafes/restaurants
the cab companies, who run and market these cars to ensure
• Self-drive holidays - Self-drive holidays, including hiring of
their retention as well as to promote domestic fixed circuits.
self-driven cars need a complete re-look in the Indian market.
Allow flexibility in commercial/taxi registration permit Currently, only 10,000 self-driven commercial vehicles are
conditions registered in 30 cities across India. The base should be
expanded to include a larger number of railways, airports
Registrations are currently categorized into local point to point and city gate ways. This will attract younger population
movement/ inter-city travel/self-drive rentals. The government who could combine their air/rail travel with self-driven cars.
should allow for flexibility such that the owner of the vehicle The self-driven cars should have an in-built application for
has the option of servicing different use cases, rather than the navigation and facilities for the traveller/driver
permit it holds. It will help in his being able to earn a living and • Caravan tourism - It should be promoted for road trip
fulfil their commitments to the bank in terms of the EMI holidays as it will give a unique experience to visit many
destinations while limiting contact with others. Government
Allow private cars to be rented on self-drive basis should come up with caravan circuits and identified
camping spots. These camping spots should have the
Owners of private cars can earn their living and supplement the
infrastructure for waste management and other basic
cost of owning a private car through renting them on self-drive
services such as water and food. Petrol pumps on the
basis. This may require taking appropriate insurance cover but
highways can also expand their services for caravans
can help in the development of self-driving in India
to provide waste management and other basic services

Travel and Tourism - Survive, revive and thrive in times of COVID-19 25


including cooking fuel. They can also provide parking space benchmarking criterion recognised by domestic and foreign
on a chargeable basis for overnight halts with CCTV for travellers alike. Current rating standards are inefficient and
additional security. biased to a large extent and due to the COVID-19 outbreak due
• Film industry - Government must encourage film makers to importance will need to be given to health and safety ratings as
shoot at Indian locales in order to showcase India further to travellers will be more aware and finicky about where they stay
both domestic and foreign markets and subsequently create while on holiday
demand. India should have a single window clearance for
all shoots to reduce delay and uncertainties. India should Development of digital content
also provide a cash rebate to reduce cost of shootings as
Digital content must be made available to potential travellers.
movie shoots are a medium to increase footfalls across the
This includes content about the destination, activities,
country.
experiences, dinning, hotels, mode of travel etc. Currently,
digital content is difficult to find, and held by foreign private
Promote the corporate travel segment
companies like Lonely Planet which increases the cost.
Online travel companies and travel management companies
in India must develop technology platforms to aid and develop Digital content should be holistically facilitated by the
the corporate hotel segment. This would ensure bookings and government in a PPP model uniformly and made accessible to
payments are made from India thus allowing revenues to sit tourists as well as domestic and inbound tour operators. Digital
in India rather than overseas as currently payments are made content needs to come in an integrated manner through API/
either by overseas associates or out of the per diem foreign web services so that tour operators, OTA, can use it for their
exchange allowance for the traveller. customers in a holistic manner. The content is recommended
to be in English as well as Hindi, Gujarati, Tamil, Telugu and
Current trends and patterns indicate bookings and payments Bengali to cater to all kind of travellers. The key focus should be
are made by the traveller overseas, which can be brought on making India become an “Internet bookable” destination by
in-house by the companies. Not only will it increase their fostering investments in this direction.
penetration but will also contribute to government through GST
collections. Investment in emerging technology and
local skill development
Create a more conducive business
environment • Artificial intelligence and machine learning - Study
possible uses of emerging technologies, such as artificial
The government should re-visit their regulations, taxation intelligence, machine learning and virtual reality, in the
and other norms to increase ease of doing business in India. travel and tourism sector in handling queries, providing more
Organisations are choosing to register their companies abroad information to potential travellers, as well as saving business
citing stable regulations, subsidised tax rates and increased costs. Making the same available via PPP arrangements to
global investor interest as reasons. The Indian government the larger market rather than the handful who can afford
should look at adopting foreign best-practices to ensure it. Institutes under the Ministry of Tourism should add AI to
maximum Indian companies register in the country. With a the syllabus not only to educate students and professionals
foot in the door through large Indian technology firms already alike on the subject but to aid innovation. Private tour
servicing global customers, this can be extended to the travel operators should be guided by the government and
and tourism sector also. educated about the role artificial intelligence can play
• Big data - Government of India should invest in utilising Big
Assistance to accommodation providers Data via PPP arrangement as a means of identifying India’s
unique proposition across various points in a customer
Develop public-private-partnerships (PPP) for rating of hotels
journey. This would include the study of all possible
and other accommodation facilities to increase efficiency of
touchpoints from booking at source to airline/GDS bookings,
said ratings spanning the entire nation using international

26 Travel and Tourism - Survive, revive and thrive in times of COVID-19


hotels, car rental services and many others to increase • Come up with standardised guidelines for tour operators,
customer experience, allowing entities within the sector to do on ground service providers, monuments etc. and work on a
the necessary value add to attract more travellers health certification model with frequent checks
• Operators should re-look at monuments and associated
Guidance for companies in the infrastructure such as toilets, steps, slopes to see how they
can be made user friendly, especially for the differently
travel and tourism sector abled, have railings for the elderly, etc.
• There would need to be a continuous monitoring of assets
Airlines and properties through an app, so that the tourists have a
proof of safety and hygiene before they enter a property
• Stricter audit of compliance to rules, regulations and SOPs – They need to focus on all touch points such as transfer
for operation, maintenance and other related activities to cars, luggage, laundry etc. and work on creating a
ensure safety of passengers and crew post lockdown. contactless experience
• Temperature screening of passengers and crew, regular
sanitisation and fumigation of terminals and disinfection of Hotels
airplanes should be implemented
• Food vendors for airlines should follow extremely high • Recognise essential workers
quality and hygiene standards. If possible, on-board meals Companies are recommended to offer special packages
can be discontinued on short haul flights for the duration of to healthcare workers and other essential workers. These
a few months packages can be in the form of free or lower cost hotel
• Hand sanitisers should be readily available on all aircrafts, membership offerings. Some hotels are already providing
and one or more universal precaution kits should be complimentary rooms and giving their highest tier of
provided to protect the crew membership to these workers. Hotels can also consider
• Passengers boarding and de-boarding the aircraft should donating food from the hotel restaurants to local hospitals.
be made to sanitise thoroughly, with temperature checks
being conducted at both times • Invest in hygiene and communicate with clients
• Airlines should start operations by determining the optimal Hotels need to revise their room cleaning protocols. They
size of their networks and fleet and which routes to start first, need to review how medical assistance facilities can be
based on demand created/improved to assist travellers. Create a new standard
• Airlines can consider M&A opportunities including operating process of safety and hygiene to maintain
divestitures or the sale and purchase of minority equity cleanliness in the hotel and train the staff to follow it.
stakes Identify all possible touchpoints and invest in contactless
• Instead of firing staff, airlines can reduce payroll profits for technologies to ensure that all these touchpoints are
top level executives automated and interaction with hotel staff is minimised.
• Instead of reducing the crew fleet size, the duration of flight • Encourage future bookings
hours worked per member can be reduced and distributed to Companies are suggested to encourage future and
a larger number of the workforce potential customers to consider booking travel packages/
• A project management team should be created to manage hotel bookings in advance at a reduced rate.
cash until operations start returning to pre-crisis levels.
Airlines should also focus on a digital and data-driven Companies could consider providing a discount on future
approach bookings redeemable up to December 2022.

Tour operators and travel agents For e.g. a hotel can offer to provide a 10-day holiday
package for 60% of its original sale price. They can offer it
• Creating holidays with farmers and rural India. A positive as a coupon which can be redeemed by the buyer any time
push is required to co-create holidays with farmers and rural before December 2022.
India, which will help in wealth creation and distribution

Travel and Tourism - Survive, revive and thrive in times of COVID-19 27


• Flexibility instead of refund also try and honour all client reservations and bookings
Companies can offer to allow the customer to change their that were cancelled or deferred due to the crisis. The hotels
dates of bookings without any cost. Companies could also should leverage the opportunity to market the right products
consider providing a reduced price if a customer chooses to through promotional campaigns to cater to the domestic
re-book instead of cancelling their bookings. market.

• Gift cards/vouchers Lodges


Companies can consider providing a gift card or a voucher
with a benefit which can be used by consumers later. • Compliances
Lodges need to ensure that they are meeting all revised
• Promote skill development for employees government and brand norms. They should also continue to
Companies should focus on upskilling the staff to prepare follow the health and cleanliness guidelines and reassure
them for the revival stage. Companies should support guests and employees by intensifying routine maintenance
the employees by helping them develop new skills for the and increasing deep cleaning measures.
recovery and growth phase post COVID 19. Companies
can also liaise with educational institutes to develop online • Investment in contactless technologies
training courses for your staff. Lodges should accelerate investments in “no touch”
technologies such as eye scanners gesture controls and
• Loan staff arrangement automation to personalise digital interactions while enabling
For staff less than a certain salary threshold (cleaning staff, social distancing.
maintenance etc.) companies could consider discussing
feasibility of loan staff arrangement for the next three Railways
months with firms who are in the essential services industry.
This could help companies in getting short term reprieve on • The Indian Railway Catering and Tourism Cooperation
salary cost, while beefing up personnel in essential services. (IRCTC) should reduce the annual management charges
from INR 12 to INR 6 per each ticket. At the same time,
• Vendor management OTA’s should be encouraged to invest INR 4-5 per ticket
After assessing the supplier capability and categorising for domestic holiday demand creation and improving the
all operating supplies including perishables in order of experience of rail booking platform. IRCTC should allow
importance, the procurement team must ensure proper stock private OTAs to advertise to boost domestic demand
piling. • Currently, 10% of the rail tickets are hosted by IRCTC. A
feasibility study should be conducted to add the same rail
• Power and equipment tickets to IRCTC inventory, the rail inventory enhancement
Before starting any equipment, a thorough service plan will not only also assist towards booking and payment
should be made to ensure that all equipment is fully on digital platforms but also reduce government costs for
functional and safe. Hotels can also shut down floors with selling
no occupancy, thus helping them save majorly on-air
conditioning costs as well as other operational costs.

• Continuously contact your client base


Maintain contact with clients through digital marketing
campaigns across channels and platforms. Hotels should

28 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Government relief
packages in other
countries

Travel and Tourism - Survive, revive and thrive in times of COVID-19 29


COVID-19 has adversely impacted the global travel and Countries worldwide are undertaking initiatives for the survival
tourism industry. The unprecedented nature of the pandemic of industry. Some of these initiatives are as follows:
makes it extremely crucial for government bodies to step up
and provide relief to prevent further collapse of the industry.
Hong Kong
United Nations World Tourism Organization (UNWTO) is
An aid of HKD 2 billion (USD 258 million) has been released
working closely with the World Health Organization (WHO),
for airline and aviation operators. The Anti-Epidemic Fund’s
government bodies and industry leaders in the travel and
Travel Agents Subsidy Scheme was created through which
tourism sector to minimise the impact of COVID-19 on the
1,350 travel agents have received payments to help them
industry globally. According to the UNWTO, small to medium-
tide over the financial difficulties arriving from the outbreak.
sized enterprises, which account for approximately 80% of the
Each eligible travel agent would receive a one-off subsidy
tourism sector, will be particularly impacted. The sector and
of HKD 80,000 (USD 10,322). As of April 2020, 98% of all
all it’s segments will require adequate political support and
licensed travel agents in Hong Kong have registered for the
recognition to bounce back. Thus, the UNWTO has called for
payment. The government will also be providing relief to local
financial support and incentives in the affected economies.
employees by paying 50% of monthly salary capped at HKD
Along with the UNWTO, the World Travel and Tourism Council 9,000 (USD 1161) for six months.
(WTTC) is also urging governments around the world to support
the sector and help save the industry, in three areas mainly:
Italy
1 Protecting the Livelihoods of Workers by providing financial
The Italian government enacted the “Cure Italy” package in
assistance to protect the incomes of the workers in this
April 2020. With EUR 10 billion out of the EUR 25 billion decree
industry.
specifically to support employment and workers, the stimulus
2 Fiscal Support can be provided by the government who
will help in freezing job cuts for 2 months. Under the package,
can extend vital, unlimited interest-free loans to global travel
the government will also pay for 80% of the employee salaries
and tourism companies as well as the millions of small and
and self-employed or seasonal workers can apply for a special
medium-sized businesses as a stimulus to prevent them from
pay-out of EUR 600 (USD 654). Italy has also set up a EUR 500
collapse. The governments should also waive dues and other
million (USD 545 million) fund to deal with the damage suffered
taxation requirements from the travel and tourism.
by the aviation industry. Further, affected families are eligible
3 Injecting Liquidity and Cash by assisting players, big and
to apply for suspension of mortgage payments; caretakers of
small, of the Travel & Tourism sector with cash flow.
afflicted, disabled can take 12 days off, and parental leave has
been extended by 15 days in March and April.

Germany
The government has pledged an unlimited amount of cash
to prevent any company from going bankrupt. It is also
suspending legal obligations for firms facing severe liquidity
problems to file for the same, until September 2020. The
government’s liquidity assistance envisages a massive
expansion of loans of approximately USD 610 billion, provided
by the country’s development bank. 

30 Travel and Tourism - Survive, revive and thrive in times of COVID-19


Australia and eateries, a 100% tax rebate has been announced for 2020.
The government has also passed a bill to assist individuals or
The government has pledged AUD 1 billion (USD 632 million) businesses who are unable to execute contracts and allows
to support those sectors that have been disproportionately deferment of the same.
affected by COVID 19, which includes travel & tourism. This
includes a payment of AUD 1,500 (USD 948) per fortnight The government has also established a Tourism Recovery
per employee which was initiated as of 30 March 2020. This Action task force (TRAC) to enable recovery by developing and
includes waiver of fees and charges for tourism businesses implementing strategies to aid the tourism industry.
that operate in the Great Barrier Reef Marine Park and
Commonwealth National Parks. AUD 700 million (USD 442
million) has been dedicated to provide support for business
United Kingdom
investment to support 99% of businesses and every 3 in 4 A stimulus package amounting to GBP 330 billion (USD 413
workers until 30 June. billion) has been set out by the government. It includes a 12-
month business rates holiday for all retail, hospitality and
leisure businesses in England; a grant funding of GBP 25,000
France (USD 31,274) for retail, hospitality and leisure businesses with
A EUR 2 billion (USD 2.2 billion) solidarity fund has been set property with a rateable value between GBP 15,000 (USD
up for eligible travel and tourism businesses. These include 18,764) and GBP 51,000 (USD 63,800). Payment of VAT has
businesses whose activities have been closed, non-food trade, also been suspended until the end of June. The government
SMEs that have lost turnover by 70% compared to March has also stepped in to pay people’s wages with a new scheme
2019; SMEs with a turnover of less than EUR 1 million (USD 1.1 under which a grant will cover 80% of wages up to GBP
million). Under the solidarity fund, employees with at minimum 2,500 (USD 3,127) for those employees kept on payroll. This
wage salary or less are 100% compensated. Additionally, grant will be available for three months, with the possibility
partial unemployment will be fully reimbursed by the State for of extension, and will cover businesses of any size. The first
wages as high as EUR 6,927 (USD 7620) a month (4.5 times the payments were made at the end of April. The Government has
minimum wage). also implemented the Coronavirus Business Interruption loan
scheme to provide easy credit and finance SMEs as well as
enable fundamentally strong companies to continue without
Singapore being affected by the short-term freeze.
The government has rolled out a number of policies and
measures, with a focus on providing assistance to the sector. Philippines
The country has waived license fees for hotels, travel agents
and tour guides, enhancing training schemes and subsidizing The travel and tourism sector will receive significant portion
them up to 90%. The government will also provide salary of the government’s USD 523 million support package to
support up to 75% of fixed monthly salaries for all sectors combat the coronavirus outbreak. Specifically, USD 271
up to SGD 4,600 (USD 3248) per employee. The temporary million aid from the Tourism Infrastructure and Enterprise Zone
bridging loan program enables cash flow, with rebates on Authority (TIEZA) has been earmarked for various programs
aircraft landing and parking charges, rent rebates for shops and projects of the Department of Tourism in Philippines.
and cargo at Changi. The Government has fleshed out the To support workers, USD 23 million from the Social Security
scheme for Enterprise financing- SME working capital loan and System will be used as unemployment benefits for workers
implemented a 25% corporate tax rebate ceiled at USD 15,000 from the private sector. To promote Philippines as a destination,
per company and has also introduced a one-off wage support once the sector is in the recovery phase, the Department of
scheme to increase employee retention by businesses. For Tourism (DOT) is allocating approximately USD 118 million for
commercial establishments including hotels, tourist attractions a new campaign for domestic travel and to create content that
targets emerging countries unaffected by Covid-19. In order
to ensure employability, USD 58 million has been sanctioned

Travel and Tourism - Survive, revive and thrive in times of COVID-19 31


as a scholarship grant fund for the upskilling and reskilling of United States of America (USA)
workers who have been temporarily displaced.
The country passed a USD 2 trillion stimulus bill to help the
economy. The package includes USD 32 billion in grants for
Spain wages and benefits to the airline industry. The companies
receiving this assistance are barred from making furloughs,
The Spanish government announced a financing line of EUR
pay cuts, or stock buybacks, and from issuing dividends to
400 million (USD 436 million) with guarantee from the ICO
investors, through September. Limits have also been imposed
(Official Credit Institute of Spain), for self-employed individuals
on executive compensation. This stimulus package in the
and tourism companies, domiciled in Spain in need of liquidity
United States also includes USD 75 million for the National
with a limit of EUR 500,000 (USD 545,270), including transport
Endowment for the Arts and USD 25 million to support the John
companies, taxis, hotels, restaurants, car rentals, travel
F. Kennedy Center for the Performing Arts. The U.S. travel and
agencies, museums among others. The funds will operate as a
tourism industry is also seeking USD 150 billion in relief to
4-year loan; with a fixed interest rate of 1.5%. The government
help grapple with the coronavirus pandemic and maintain
is supporting temporary workers who lost their jobs by
employee payrolls. USD 350 billion in loans for small businesses
providing them with EUR 440 per month. For individuals on
to provide for salaries, wages and benefits as much as 250% of
furlough, the government will be paying 70% of the workers’
the employer’s monthly payroll.
wages. Various tax payments have been deferred including VAT,
company and personal income tax to May 2020.

Portugal
The government has placed particular emphasis on the travel
and tourism sector by establishing a dedicated EUR 60 million
(USD 654 million) credit line for micro-businesses in the sector
and by working closely with stakeholders within the sector
to respond to the challenges resulting from COVID-19. Other
key measures include EUR 200 million (USD 218 million)
credit line for large businesses, extraordinary support for the
maintenance of employment contracts in a company in the
amount of two-thirds of the remuneration, and ensuring 70%
of Social Security, the remainder being borne by the employer,
offering of training scholarships in the Institute for Employment
and Vocational Training in Portugal (IEFP) and extending
the deadlines for payment of taxes and other declarative
obligations.

The tourism ministry has also introduced a scheme within which


travellers forced to cancel their trips due to the pandemic will
be eligible to reschedule their trips till December 2021. The
scheme also states those unable to complete their trip will be
eligible for a full refund in 2022.

32 Travel and Tourism - Survive, revive and thrive in times of COVID-19


References

• World Travel and Tourism Council


• World Travel and Tourism Council; Economic Impact 2020
• Tourism and Industry IBEF Report (December 2019)
• Ministry of Tourism, Government of India Annual report 2019-2020
• Ministry of Tourism, Government of India Annual report 2018-2019
• World Economic Forum Travel and Tourism Competitiveness report 2019
• Invest India
• India Brand Equity Foundation Tourism and Hospitality Report
December 2019
• CARE Ratings; CARE Ratings in press
• International Air Transport Association
• Hotelivate; impact on hotel industry
• Indian Association of Tour Operators
• Airport Authority of India; Regional Connectivity Scheme- UDAN
• Sureshprabhu.net; At Nation’s service; Major initiatives as Minister for
Civil Aviation
• International Monetary Fund; Policy responses to Covid
• World Travel and Tourism Council; Government hub for Covid response
• Country specific websites for Covid relief packages

Travel and Tourism - Survive, revive and thrive in times of COVID-19 33


About FICCI

Established in 1927, FICCI is the largest and oldest apex business organisation in India. Its history is closely interwoven with India’s
struggle for independence, its industrialisation, and its emergence as one of the most rapidly growing global economies.

A non-government, not-for-profit organisation, FICCI is the voice of India’s business and industry. From influencing policy to
encouraging debate, engaging with policy makers and civil society, FICCI articulates the views and concerns of industry. It serves
its members from the Indian private and public corporate sectors and multinational companies, drawing its strength from diverse
regional chambers of commerce and industry across states, reaching out to over 2,50,000 companies.

FICCI provides a platform for networking and consensus building within and across sectors and is the first port of call for Indian
industry, policy makers and the international business community.

Mr. Manab Majumdar Mr. Manish Ahuja,


Deputy Secretary General, FICCI Director and Head- Tourism, FICCI
E: manab.majumdar@ficci.com E: manish.ahuja@ficci.com

Contact details

Mr. Manish Ahuja


Federation of Indian Chambers of Commerce and Industry
Head - Tourism and Director
Federation House, 1, Tansen Marg, New Delhi 110001, INDIA
P: +91 11 23487575
E: manish.ahuja@ficci.com www.ficci.in
Ms. Samanda Syiem
Additional Director Facebook: www.facebook.com/ficciindia
P: +91 11 23487490
Twitter: www.twitter.com/ficci_india
E: samanda.syiem@ficci.com
Blog: blog.ficci.com
Mr. Anirban Chatterjee
Additional Director
P: +91 11 23487459
E: anirban.chatterjee@ficci.com
Mr. Chetan Mehta
Senior Assistant Director
P: +91 11 23487576
E: chetan.mehta@ficci.com

34 Travel and Tourism - Survive, revive and thrive in times of COVID-19


About Grant Thornton
in India
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Travel and Tourism - Survive, revive and thrive in times of COVID-19 35


Acknowledgements

FICCI Authors For media queries, please contact

Mr. Vinod Zutshi Rohit Nautiyal


IAS (Retd.), Former Secretary, Ministry of E: rohit.nautiyal@in.gt.com
Tourism, Government of India
Mr. Ashish Kumar
Co Chairman, FICCI Travel Technology
Editorial review Design
Committee & Thought Leader
Rohit Nautiyal Gurpreet Singh
Mr. Manab Majumdar
Charu Sharma
Deputy Secretary General, FICCI
Mr. Manish Ahuja
Director and Head - Tourism, FICCI

GT Authors

Varun Parashar
E: varun.parashar@in.gt.com

Aastha Khatri
E: aastha.khatri@in.gt.com

Juhi Pilani
E: juhi.pilani@in.gt.com

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