COVID-19 – Impact on Travel and Tourism in India

What’s Happening?

The world is facing one of the most significant pandemics of the century, the COVID-19. The first case registered in December 2019, has grown to more than 3 Crore now. To contain the spread of the disease, the majority of the countries have imposed lock down and travel restrictions in their country. Due to this, business and trade have been affected severely. The travel and tourism industry is considered to be the hardest hit industry in these tough times.

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Impact on this Industry

The Travel and Tourism industry is a mix of three industries: the Travel, Food, and Hospitality Industry. Domestic travel restrictions have eased a little, but international travel restrictions will take time to commence again. Only international flights to the UAE have started till now. Dining out has not been begun to the full extent as people still prefer takeaways or home deliveries. Hotel and logging services have not started as their original design, but instead, many of them have turned into quarantine centers.

The Indian Travel and Hospitality industry contribute largely to our GDP. According to WTTC, the industry contributed US$ 194 billion or 6.8% to the Indian GDP in FY2019. India ranked 10th among 185 countries for its spending on travel and tourism in 2019. India ranked 3rd based on investment in travel and tourism, amounting to the US $45.7 Billion (IBEF, 2018). As per IBEF reports, almost 4.2 crore jobs were created in the industry in 2019, a manifestation of enormous employment opportunities. As per a report by FHRAI, nearly 38 million people lost their jobs due to the Covid-19 pandemic in this industry.

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A recent report from CARE Ratings predicts that the demand for travel and tourism will be affected. But the demand for other Asian countries is expected to get diverted towards India. Global travel is expected to see a decline of 25%, of which India will bear a loss of 5 lakh crore, as per WTTC.

It is also projected that the industry will incur a loss of INR 1.25 trillion in 2020, a 40% decline in revenue from 2019 (as per CARE Rating’s Report).

In India, states like Rajasthan, Goa, Sikkim, Kerala, and many more highly depend upon tourism for revenue. These places have seen a lot of abandonment of vacations and business travel for the coming months. With these cancellations and the vacation period passed, the state governments will also be in shortage of funds.

According to CARE Ratings, the FTA’s have reduced since January; 50% in Jan-Feb, 70% during March, and almost 0% in April – June quarter, this year. With the decreasing FTA’s, the hotels dependent on foreign tourists will be the worst hit among all.

Steps to overcome the COVID-19 crisis and Way forward

STEP 1: Finding Cure

The vaccine for COVID-19 will play an essential role in the revival of the industry. Many institutions around the world are working on developing it. Vaccine from institutions like Oxford has shown positive results, and if all goes well, we will have a vaccine by the end of the year.

STEP 2: Public Awareness

The tourism sector is driven by people’s psychology, as they have become sensitive to safety and security. Institutions in the industry ought to gain trust by ensuring travelers with the safety and sanitization of the place. Several measures will have to be taken in this respect, like disinfecting and sanitizing public areas, hotels, and travel vehicles.

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STEP 3: Proactive planning

As people have been indoors, they would like to go on a trip to beat their lockdown blues. So the industry would soon see a sudden surge in demand shortly. They can use this time to prepare themselves for future opportunities as people would choose places that have taken proper sanitization and safety measures.

STEP 4: Government Support

The government is also looking forward to helping in the revival of the industry by setting new standards and protocols that the industry has to follow to maintain safety and security. As our Minister of Tourism, Mr. Prahlad Singh Patel said in an interview with The New Indian Express, “We are making efforts to engage with our stakeholders and citizens of our country to sustain their interest in traveling within the country once travel restrictions are lifted.” We hope this encourages domestic travel with initiatives like ‘Dekho Apna Desh’ and ‘Incredible India. is an award winning personal finance platform. It helps you aggregate all your personal finance accounts like FD, Equity, Mutual Funds, PPF EPF, NPS including, Credit Cards & Loans etc. It's one place where you can track, plan and invest seamlessly. empowers you to invest in zero commission direct plans of mutual funds thereby helping you generate higher on investments. The best part is it comes with a lifetime Free plan.

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