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Impact of Covid-19 on Indian Tourism Industry

In the sphere of infectious diseases, a worldwide outbreak may be a worst-case scenario. The whole world has become one family after globalization and the market today is highly competitive and interdependent upon the functioning of various industries to foster its growth. Tourism, one of the biggest and rapidly flourishing sectors has been considered as a resistless industry. In comparison to other industries, the tourism industry gets more affected due to any internal or external shocks or distress. In this regard, the latest outbreak of Covid-19 has caused anxiety across the world.

Background

A novel coronavirus virus originated from the Wuhan province in China during December 2019, which posed an international public health emergency and had acquired the position of an awfully high-risk infectious virus. The outbreak of Covid-19, the disease caused by the novel coronavirus, has expanded its roots to 195 countries with more than 10 million cases across the world recorded as coronavirus positive as of this writing. Of note, worldwide researchers and various health agencies are all at once doing their best to fade the spread of this virus and avoid any possible contagion situation to be faced, which otherwise would threaten the lives of many people at large.

As reports of Covid-19 came pouring from across the world, the Indian government took preemptive steps to screen the passengers at the airport. Indian citizens returning from different countries were being evaluated for clinical symptoms, tested for Covid-19, and quarantined for two weeks. During mid-March, the government started imposing the flight bans and visa restrictions, by which time it was obvious that the aviation and tourism industries were going to be heavily impacted. To be clear, India is not the only country imposing flight bans and visa restrictions; the United States has issued similar orders around the same time. On March 24th, the Government of India had announced a complete lockdown in the country to control the situation to prevent the further spread of the virus. The lockdown, which continued till the end of May in some form or the other, has helped prevent the spread of Covid-19 to a considerable extent even though it came at the cost of economic output. While the migrants and daily wage workers may the most affected among all classes due to the Covid-19 pandemic, the travel, recreation, and tourism might be the most impacted sector in the Indian economy. While some industries have been ‘unlocked’ early June, the restrictions on travel and tourism might continue for quite some time to mitigate the risk of infections in cities, towns and villages.

Indian Tourism Industry

India is a vast market for travel and tourism. It offers a heterogeneous portfolio of niche tourism products – cruises, adventure, medical, wellness, sports, eco-tourism, film, rural and religious tourism. India has been identified as a destination for sacred tourism for domestic and international tourists. In recent years, India had experienced exponential growth in travel and tourism aided by different kinds of travel.

Tourism sector in India generates significant revenue for the Indian economy besides contributing to the global output. Before the onset of the pandemic, the sector was growing rapidly as it supports a large employment base and rakes in huge profits. Today, the country has many preferred destinations for both domestic and international travelers.

The World Travel and Tourism Council (WTTC) reported that the tourism in India generated Rs.16.91 lakh crore or 9.2% of India’s GDP in 2018 and supported 42.673million jobs, which is 8.1% of its total employment. According to the WTTC, India has ranked 3rd among 185 countries in terms of travel and tourism’s total contribution to GDP in 2018.

Impact of Covid-19 on Tourism

The rapid spread of coronavirus has halted domestic and trade activities, and disrupted routine activities of many nations bringing their economies to a halt. Several countries across the world continue to announce travel restrictions as a part of their efforts to contain the spread of the coronavirus. Thus, tourism across the world is getting impacted although it might be more severe in India due to its large number of religious and historic places. Indian Association of Tour Operators (IATO) estimates the hotel, aviation and travel sector together may incur a loss of about ₹85 billion due to travel restrictions imposed on foreign tourists, which has resulted in large scale cancellations. Though domestic transport facilities are being made somewhat operations as of this writing, the social distancing norms will continue to impact tourism for the rest of the year.

India’s total foreign tourist arrivals (FTAs) stood at 10.9 million and the foreign exchange earnings stood at Rs 210,971 crore during 2019 with Maharashtra, Tamil Nadu, Uttar Pradesh, and Delhi accounting for about 60% of FTAs. However, now with travel restrictions in India for over 80 countries and the international flights being suspended (and domestic flights being operational with restrictions), the Indian domestic travelers and FTAs will witness a significant decline during 2020. The sector is staring at a potential job loss of around 38 million, which is around 70 percent of the total workforce.

Even without regard to tourism, the cancellation of events (personal or business) will adversely impact the revenues of airlines, railways and buses. In addition, demand for petrol, oil and turbine fuel will substantially decline, thus affecting the petroleum and oil industries. The impact will be felt on both white and blue-collar jobs. Since airports would function at less than their normal capacity, it would impact the contract and temporary workers in the airports. All this shows the cascading effects of impact to the travel and tourism industry.

Conclusion

As the world faces its biggest pandemic in a century, almost all the sectors of the economy are hit and will take a long time to recover. The tourism sector lookout will really depend on how rapid this virus spreads, or how it is contained. If the virus starts subsiding in the third and fourth quarter this year, we can predict that the tourism sector will recover partially in 2021, but will take a long time to recover completely.

The tourism sector is driven by the psychology of people and is very sensitive to safety and security aspects. Companies have to regain the trust of people in the recovery period to travel again after the pandemic and thus it would be a challenging task. Unlike other business sectors, tourism will take a longer time to return to normalcy in the recovery period because tourists need to ensure that the situation is really safe and secure before they step out to travel again. To assist the tourism sector recover quickly after the pandemic, several actions must be carried out such as disinfecting major tourist destinations, including hotels, in order to regain people’s trust that tourist destinations and accommodations are all safe from Covid-19.

-Rhea Chopra (One of the prize winners of Covid-19 Article Writing Competition in the 18-24 years age group)

Picture Credits: businessworld.in



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