Travel restrictions imposed to control the Covid pandemic took a toll on the tourism sector with just three million foreign tourists visiting India in 2020, down by whopping 75 per cent from 10.93 million footfalls in the previous year.
Though the Government is yet to assess the losses in earning terms, players in the sector put it around `5 trillion or USD 65.57 billion, with the organised sector alone likely to lose $25 billion.
To add to the agony of the sector, the Budget 2021-22 announced Monday had nothing much for its development, lamented the industry players.
Tourism Minister Prahlad Patel on Tuesday told the Rajya Sabha in a written reply that while in 2019, the number of foreign tourist arrivals was 10.93 million, the number stood at 10.56 million in 2018. It was in 2017 that foreign tourist arrivals first time crossed the 10 million-mark. There were 10.4 million arrivals in that year, he said.
However, last year, foreign tourist arrivals stood at 2.68 million and “no formal study has been instituted for assessment of loss of revenue in 2020”, Patel said.
“However, several rounds of discussions and brainstorming sessions with industry stakeholders indicate massive loss of revenue, foreign exchange and jobs. In view of the highly unorganised nature of the sector, the impact in numerical terms can only be ascertained in due course,” the minister said.
Tourism sector is one of the largest industry and accounts for 6.23% of the country’s gross domestic product (GDP) and provides employment to 8.78% of the population.
“With an aim to incentivize stakeholders in the tourism industry, the guidelines for the scheme of Market Development Assistance (MDA) for providing financial support to stakeholders for the promotion of domestic tourism have been modified to enhance the scope and reach of the scheme, so as to provide maximum benefits to the stakeholders,” Patel told the House.
However, industry players are not impressed as they said that they were looking for some major push in the Budget on Monday, but in vain.
Subhash Goyal, General Secretary, FAITH and President, Confederation of Tourism Professionals, said that this was a great opportunity for the Government to revive the tourism Industry and save at least 30-40 million jobs which are on the verge of extinction out of 75 million people who are directly and indirectly employed in this industry. “Not just Tourism, it is not mentioned of the services sector, which is a largest employment generator, in this Budget,” Goyal said in a statement.
Rajeev Kale, President & Country Head – Holidays, MICE, Visa, Thomas Cook (India) Ltd in a statement here said that the budget was noticeably silent on specific announcements towards the travel and tourism sector. “A 19% reduction in the tourism budget from Rs. 2499.83 cr to Rs. 2023.04 cr is a strong concern for a sector that contributes 10% to the country’s GDP and is a critical source of employment for travel, tourism, hospitality and allied industries,” Kale said.
Nakul Anand, Chairman, FAITH, minced no words as he said, lack of immediate direct support in budget has disappointed the Indian travel and tourism industry. “The tourism, travel & hospitality industry was looking at support for immediate and short-term measures for critical revival. This has not happened in the budget announcements.
“While infrastructure measure announced as budget announcements, may boost tourism over long term, the opportunity for immediate support has regretfully been missed out,” he asserted.
A study by industry chamber CII and hospitality consulting firm Hotelivate released late last year, had said that the organised sector alone is likely to lose USD 25 billion. The figures are quite alarming and the industry needs immediate measures for survival, according to the CII-Hotelivate report.
As per the study, occupancy was at its peak in January (2020) at 80 per cent followed by February at 70 per cent, dipping to 45 per cent in March and then to the lowest at 7 per cent in April.
In May, June, July and August occupancies were at 10 per cent, 12 per cent, 15 per cent and 22 per cent, respectively, it added.
"This is the one of the worst crises ever to hit the Indian tourism industry impacting all its geographical segments - inbound, outbound and domestic, almost all tourism verticals - leisure , adventure, heritage, MICE, cruise, corporate and niche segments," said the study.