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Tourism Sector crumbles like a house of cards

Dreadful figures and reports show that the tourism industry has fallen off a cliff. From small homestay owners to big travel conglomerate, everyone is sailing into a tornado and hoping for a survival.

By Bharti Sharma
Published on :

The world witnessed a huge paradigm shift in the last few months; many businesses have undergone head-to-toe makeover embracing technology, working from home and what not.  Though some businesses were in a better condition to endure such drastic transformations, but there is one sector that has been hit brutally by the pandemic even before it arrived in India. Yes, it’s the tourism sector! The vagueness around the length and breadth of disseminating crisis calls for a concrete plan of action for the tourism industry. The pandemic is going to have lasting effects on the industry beyond a thinned-out competitive landscape.

Shaibal Dutta, a tour operator residing at Domjur city of Howrah district in West Bengal was in extreme distress when the tourism industry came to a halt. Like several others whose livelihood depends upon the tourism industry, he received countless cancellations and his business was eventually shut down. But what made him more vulnerable was an ailing father with a severe heart condition, a mother suffering from kidney problems and his only son – a patient of mental health disorder. Being the only bread winner in his family, he was devastated as he couldn’t even bear the medical expenses of the family. Facing financial crisis, he opted for a bank loan of five lakhs at the beginning of the lockdown, secured by mortgaging his only asset; the house. Without earning a single penny from the business, he failed to pay the loan EMI, resulting in extensive pressure from Bank. With compounding mental pressure, and in a situation of not being able to arrange funds for even feeding the family, he decided to commit suicide along with the entire family.

Amidst the breakdown, he addressed letters to the Prime Minister, the Chief Minister of West Bengal and to the Local MLA as well, but no one found it worthy enough of paying some attention to his plead. The only person who came forward and helped him after encountering his poignant story was Raja Bhowmick, the BDO of the area. He arranged funds for the child’s treatment and assured him to arrange some more financial assistance for the family.

Shoban is one of the million travel professionals who have been hit hard by the pandemic. The tourism industry is working on everything to stanch the bleeding. They pleaded the government for support, relief or stimulus but on every step they have only stumbled upon disappointment and negligence. Along with some active social media campaigns, FAITH & its ten member associations has managed to arrange constant dialogues with all factions of the Government such as the PMO, ministries of Finance, Commerce, Aviation, RBI, all 28 Chief Ministers, Niti Aayog, the Empowered Group 6 and the Ministry of Tourism but to no avail.

An industry that contributes almost 10 per cent to India’s GDP is dead in its tracks with a slew of travel restrictions and our ignorant government machinery. Unemployment has soared record high as travel companies across the spectrum have furloughed employees. Many hotels closed as necessary public health measures such as lockdown restrictions were put in place around the globe. Numerous properties remain closed till date, and a majority of the lot expect to never reopen their doors for public again.

“We have been completely disappointed by the government’s lack of empathy for the suffering tourism sector. Tourism industry has borne the maximum brunt of this pandemic and an industry of the size of INR 18 lakh crore is on the brink of collapse. The government suggests taking loans to pay salaries, an absurd proposition nevertheless. Which business takes a loan on interest for paying salaries, without generating any income? Loans are meant for expansion, when the business is not happening, what will we expand.,” shares Pronab Sarkar, President, Indian Associations of Tour Operators (IATO).

Indian tourism travel and hospitality is said to impact 10-12 per cent of India’s employment which is believed to cover almost 5 crores+ direct and indirect jobs. With no visibility of cash inflows, the Indian tourism industry is now looking at large scale bankruptcies, business closures which will lead to more job losses across cities, towns and hinterlands of India. Even if the travellers are keen on traveling, they’re discouraged by the situation of security, inability to explore the destination and other restrictions. With major businesses on hold, there is no corporate or leisure business. This has the potential to set the negative coarse for the Indian tourism, travel and hospitality industry, taking it years behind. This invisible sector has a domino effect on the economy, as not only travel agents but the further chain of guides, transporters, tea sellers, restaurants at the tourist destinations face the brunt due to the ripple effect.

Jyoti Mayal President TAAI & Vice Chairperson-FAITH, shares, “We are going to see a lot of unemployment and businesses getting shut. We understand that the PM is focusing on better infrastructure and initiatives for the underprivileged but of what use is this infrastructure if the industry itself doesn’t survive?”

On 27 September, which is marked as the World Tourism Day, the entire tourism fraternity of India united for a peaceful protest driving around tourism landmarks of the city in their vehicles with planks saying ‘Save Tourism, Save Jobs, and Save the Economy’. The future of the toruism sector is walking on a two-faced knife, will the government finally recognise its abandoned knight is anybody’s guess.


In order to survive, the associations emphasised on various relief such as:

  • SEIS (A regular subsidy) – Immediate release for FY 2019-20 and enhancement to 10 per cent for FY 2020-21.
  • Atma Nirbhar Loans: Collateral free and deferred loans with low interests @ 6 per cent with moratorium till October 2022 with an enhancement from 20 per cent to 50 per cent.
  • Tourism Ministry, Government of India approved and MSME registered to be given soft loans even if they do not have past borrowings.
  • Entry fees to be either free or, reduced at all monuments or national parks till March 2022.
  • Road taxes on tourist vehicles to be withdrawn or, reduced till March, 2022.
  • Abolish tax regimes like TCS that put Indian companies at a disadvantage. Clients and overseas tour operators would be incentivized to book directly with destination companies. This would entail severe losses of revenue including foreign exchange to the Indian government.
  • Higher-income tax exemption limits to smaller companies.
  • Subsidies electricity and license charges for hotels till March 2022.
  • Create tourism bubbles between friendly nations with a simple VISA regime.
  • Faster RT-PCR Tests and results to facilitate travel between countries.

Bharti Sharma is a seasoned travel journalist with over half a dozen years of experience under her name. Having worked with travel trade magazine and good working relations with the trade members, she has an in-depth insight about the sector.