Shresth Vidyarthi | Symbiosis Law School, Hyderabad | 4th June 2020
Over the past few decades, majority of the countries have considered tourism as major contributor to the economic growth and the investment in this sector has increased year after year making it one of the most developing and growing sectors in the 21st century, generating an annual revenue of more than 4 trillion dollars worldwide. More than 550 million people visit different parts of the world annually as tourist is their desire to discover the world. According to Ziffer[1](1989), “Tourism involves travelling to relatively undisturbed or uncontaminated natural areas with the specific object of studying, admiring and enjoying the scenery and its wild plants and animals, as well as any existing cultural aspects (both past and present) found in these areas.”
The tourism sector is one of the sector which has suffered the most due to the Covid-19 pandemic because of the travel restrctions around the world as well as fall in demand among the travellers. The United Nations World Tourism Organisation has estimated a decline of 20%-30% in the global international tourist arrivals in 2020 which will to a estimated loss of around 30-50 billion[2] US Dollars to the tourism industry. In many of the world’s popular tourist destinations, planned travels witness a decrease by 80%-90%[3] because the United Nations World Tourism Organisation (UNWTO) in its new report has said that 96% of the worldwide destinations have imposed travel restrictions in response to the outbreak Around 90 destinations have completely or partially closed their borders to tourists, while 44 destinations are closed to certain tourists depending on country of origin.
The travel & tourism sector is one of the significant contributors to the economic growth of the country. In 2018-19, the travel & tourism sector has contributed around 9.2% in India’s GDP and has generated around 27 million jobs in 2018-19. The industry is also responsible for employment oppurtunities to the rural population of the country. The tourism industry contributes 12.75% of the employemnt in the country, 5.56% of it is direct and 7.19% is indirect. “Over 87 million people were employed in the travel sector in 2018-19 in India, according to the Ministry of Tourism (MOT) annual report for 2019-20. It is estimated that in India, branded and organised hotels annual revenue is ₹38,000 crore.The restaurant industry in India, has an annual turnover of approx ₹4 lakh crore . This industry provides direct employment to more than 7 million people. India’s air transport industry employs over 400,000 people directly and 940,000 are employed in related supply chains”.
India being one of the largest tourism industry has suffered a massive economic loss due to Covid-19. It is estimated that the Indian Tourism Industry will book a revenue loss of Rupees 1.25 Trillion in the year of 2020. A detailed study by CARE[4], which is one of the most efficient and reliable research & advisory agency stated that the estimated loss corresponds to a decline of 40% in revenue over year 2019. The report held that the impact of Covid-19 on tourism at about 50% during January and february 2020 and it might get higher at 70% in March 2020 because of the suspension of international flights.
“The report mentions that during April-June, the Indian tourism industry is expected to incur a revenue loss of Rupees 69,400 crore, denoting a year on year loss of 30%. During H2 2020, assuming the virus impact subsides, we expect FTAs to still be lower affecting the FEEs (foreign exchange earnings) by about 50 per cent to reach Rs 56,150 crore vis-à-vis Rs 112,300 crore during H2 2019,” the report said”.
“The most immediate and evident impact of Covid-19 is seen in the hotel and tourism sector[5] in all its geographical segments – inbound, outbound and domestic and almost all verticals – leisure, adventure, heritage, MICE (Meetings, Incentives, Conferences & Exhibitions), cruise and corporate”.
“Given various travel restrictions imposed by the Indian government as well as governments across the globe, forward bookings for various conferences and leisure travel bookings to foreign destinations have already been cancelled. In India, most of the summer holiday bookings (for the states of Kerala, Rajasthan and Goa) have also been cancelled (about 40-50%), thereby impacting domestic tourism”.“The impact on the inbound and outbound passengers is expected to be most severe in the next couple of quarters. India’s total foreign tourist arrivals (FTA) stood at 10.9 million and the foreign exchange earnings (FEE) stood at Rs 210,971 crore during 2019, with Maharashtra, Tamil Nadu, Uttar Pradesh and Delhi accounting for about 60% of foreign tourist arrivals (FTAs). However, now with travel restrictions in India for over 80 countries and most of the flights of major airlines being suspended the Indian domestic as well as foreign travel and tourism industry is expected to witness a sharp negative impact in 2020”.
[1] Ecotourism: The Uneasy Alliance.Karen A. Ziffer. Conservation International, 1989
[2] “Tourism And Covid-19”. www.unwto.org.
[3] Team, The Visual and Data Journalism (28 March 2020), BBC News. “Coronavirus: A visual guide to the pandemic”.
[4]Impact of Covid-19 on India, http://www.careratings.com/upload/NewsFiles/Economics/Impact%20of%20CoronaVirus%20On%20India.pdf
[5] https://www.business-standard.com/topic/tourism-sector
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