Coronavirus: Tourism-travel sector faces most challenging crisis

Stares at huge losses, staff being laid off, with 90-95% cancellation of bookings, few takers for domestic travel

Coronavirus: Tourism-travel sector faces most challenging crisis

Vijay C Roy in Chandigarh

The travel figures are astounding. The tourism industry accounts for 10 per cent of the world’s GDP and jobs, and the World Travel and Tourism Council has projected that the coronavirus crisis could put up to 50 million jobs at risk, with international travel likely to slump by a quarter this year.


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What operators are seeking

  • Waivers on cancellation fee: Regulate and issue a notification to all airlines operating out of India to give relief to customers to rebook and give waivers on their cancellation policies

  • Defer TCS: The government has levied a new tax notified as TCS (tax collection at source), which is 5 per cent for those travellers who quote their PAN number and 10 per cent for those not having PAN number or who wish not to give it

  • Relief to industry: It wants the Prime Minister to intervene personally and announce relief like a moratorium of at least one year.

  • Promote destinations: As the crisis is not likely to end soon, the tourism industry is of the view that tour operators should focus on domestic travel and countries where there is no impact of coronavirus

  • ‘Industry status’: The demand has gained momentum for the “third largest revenue generator”

In India, too, over 90 per cent bookings stand cancelled and offices of tour operators wear a desolate look, despite it being the peak season for buying summer holiday tickets for outbound and domestic tourist destinations. For tour operators based out of northern region, the cancellation is over 95 per cent.

Many tour operators claim not having received a single booking during the past fortnight. Not able to bear high operational costs, some have already started trimming the workforce.

With the government suspending all tourist visas in a sweeping attempt to prevent the spread of coronavirus as cases across India continue to rise, the tourism and hospitality industry is closely watching the cascading effect.

According to Rajesh Mudgill, secretary, Indian Association of Tour Operators (IATO), the visa suspension could mean a loss of Rs8,500 crore.

“At the moment, forget about bookings, the industry is not getting even queries. Earlier, we were making bookings for domestic destinations, but with cases being reported from across India, that also has come to a complete halt,” said Gagan Sachdeva, proprietor, IV Holidays. For summer vacation, people plan their holidays in February and March as they get the best rates for hotels and airlines. Among the most preferred destinations are Europe and South-East Asia. This time, there are almost no takers.

“In the past 34 years in the industry, we have never seen such a challenging situation. The total cancellations would be around 90 per cent and there are no future bookings. We were looking at a growth rate of 10-15 per cent, which seems a dream now,” said Neeraj Malhotra, chairman, Northern Region, Travel Agents Association of India.

SOTC India, a leading travel and tourism company, has come out with flexi travel options. Daniel D’souza, president and country head, says, “Customers can be reassured on flexibility of departure dates; just actual visa fee will be charged in case of cancellations due to Covid-19.”

Also, operators are of the view that tourists can opt for countries where there is no scare of the virus as of now. Overseas tour operators are being urged to be lenient in cancellations and changes in travel dates. Further, facing huge losses, the travel agents are demanding a relief package.

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