POST COVID-19 STRATEGIES OF TRAVEL SERVICE PROVIDERS IN INDIA
Except for this Covid-19 pandemic, which has created an unprecedented catastrophe for the tourism economy, no other incident has affected travel in history. The global supply chain has stopped and, along with all economic activities, the movement of people has been halted globally. Tourism is a labor-intensive business. The tourism ecosystem comprises the airline industry, tour operators, travel brokers, hotels, restaurants, taxi providers, car services and all other ancillary services related to travel and leisure. If you go down to the value chain of tourism, we can find that local shopkeepers who sell local goods or crafts created by local people or artisans, or farmers who supply hotel and restaurant food are often indirectly dependent on the tourism industry. Tourism contributes to the GDP of countries to a large extent and serves a massive job market directly and indirectly across the world. Therefore, the lockdown has affected the overall business operations and tourist activity at the same time, resulting in a massive loss to this sector and a comprehensive loss of jobs.
Along with the US, which is currently the largest coronavirus hot spot with 2.73 million total cases with more than 130,000 fatalities, the major European economies have suffered also. More than 10 million individuals have been infected with this virus worldwide, resulting in just over 0.5 million deaths.
India was able to recognize the magnitude of the Covid-19 crisis and took urgent measures to enforce the world's biggest lockdown of 1.3 billion individuals. In India, with 17400 deaths, this virus has affected more than 0.6 million people. Maharashtra, Delhi, Tamil Nadu, Gujrat, and Uttar Pradesh are the five most affected states.
India has embarked on the Unlock Phase after spending 68 days locked down with a gradual opening of all economic activities, with certain conditions and restrictions. With a limit on international air travel, metro rails, schools, colleges, and a mass gathering of any political/religious/social/sports event, India has stated that it is unlocking phase by phase.
Assessing the Impact of Covid-19 pandemic in Tourism Sector:
World Tourism
The World Tourism Organization (UNWTO) estimated that 120 million direct tourism jobs are lost due to the COVID-19 pandemic, which has affected travel like no other event in history, and this results in a loss of revenue of US $ 1.2 trillion in the global tourism industry due to 850 to 1.1 billion lesser tourist arrivals in 2020.
The tourism sector contributes directly to GDP through the generation of foreign exchange, the production of multiple jobs and the promotion of various types of enterprises, and the growth of a country. Tourism contributes almost 4.4% of GDP in developing nations on an average and produces almost 7% of direct jobs. In Spain, for example, tourism accounts for 11.8% of GDP, while Mexico, Iceland, Portugal, and France derive 8.7%, 8.6%, 8.0%, and 7.4% of GDP from tourism, respectively.
Since tourism is a labor-intensive sector, it hires both highly trained and lowly skilled staff who may be permanent or temporary in nature. If we look at the direct jobs created in the OECD economies by the sector, tourism employment accounts for 15.7% of total employment in Iceland, 13.5% in Spain, 10.3% in Ireland, 10.0% in Greece, and 9.8% in Portugal.
It can be seen that there was a major slowdown in the global economy, and we are already facing a period of the great recession. The global supply chain has stopped, people's movement has been stopped globally, job losses would be widespread, and more measures were taken by most of the country to safeguard its economy.
India Tourism
Understanding of GDP composition is essential before estimating the impact of the coronavirus pandemic on the Indian tourism industry. The service sector accounts for around 55 percent of the total GDP, the industrial sector accounts for 30 percent, and agriculture and allied activities contribute 17 percent. The service sector comprises the financial, real estate, hotel, and transport industries, adding almost 40% of GDP8. 9.5 percent of GDP is contributed by the Indian tourism sector, which is similar to the contribution of developing countries. During the lockdown time, hotels have been closed across India along with all kinds of transport movements in India. Some activities are scheduled to resume in the transport (public) sector after August 12, 2020. (Railways). Around 5 crores of workers are absorbed by the transport sector itself.
Different advance bookings have been canceled, considering the different travel restrictions levied by the Indian government as well as by governments around the world. According to the Federation of Associations in Indian Tourism & Hospitality (FAITH), the apex sectoral body, most of the summer holiday bookings were also canceled (approximately 60 percent), affecting domestic tourism. On account of the effects of the COVID-19 pandemic, the industry has experienced a loss of US$ 13,266 billion.
The CARE Ratings report estimated that after the lockout imposed since the coronavirus (Covid-19) pandemic has hit the world, the Indian tourism industry reported a revenue loss of Rs 1.25 trillion, which is a 40 percent decrease in revenue over 2019 in calendar 2020 due to the shutdown of hotels and deferral in flight operations. The same study highlighted that the Indian tourism industry is forecast to book a sales loss of 30 percent year-on-year during April-June.
Domestically, as we have about 43 crore working population (out of a total of 46.5 crore working population) in the unorganized sector (NSSO), which includes construction workers, people associated with the tourism sector, agriculture, etc., lost their job due to lockdown
The tourism sector saw job cuts for India's 40-50 million inhabitants. In its press release on 10 April 2020, the Ministry of Tourism also recognizes that India's tourism sector is being badly affected and frequently speaks to its partners on issues relevant to tourism.
Next Set of Policy Responses: Go Glocal in New Normal
In order to move forward, we need to recognize that it is completely important that the nation's maximum attention and emphasis should be on preventing and halting the spread of the virus as early as possible with minimal positive cases of covid19. The more time we spend on battling the Covid19 virus, the more economic output is wasted. We have to recognize that a time of great recession is headed toward the global economy. The IMF has forecast negative global growth of 4.9 percent in 2020 and growth is projected to rise to 5.4 percent in 2021. GDP growth in mature economies is expected to be negative 8.0% in 2020 while developing economies are projected to develop by negative 3% in 2020.
An adverse effect on aggregate demand was generated in the middle of global volatility due to the unforeseen period of this pandemic and looming possible lockdowns coupled with new social distancing requirements, and business practices along with investment are thus projected to be pessimistic as businesses postpone capital expenditures.
In order to save their economies and life in this globalized environment, most countries are taking a more regressive path. Consequently, the entire supply chain has become seriously disrupted and so has human movement. The irony is that global tourism will be hit hard in 2020 and if the uncertainty of managing the pandemic remains, we should assume the same after 2020.
The new social standards of social isolation have caused fear in the minds of travelers and they would avoid traveling for no cause and certainly not for pleasure. Therefore, until we have a solution to the Covid-19 epidemic, people will follow the social distancing mechanism and unless it is really necessary, they will be hesitant to use public transport. It will take another 8-9 months to resume normal economic activity, even if the vaccine is available within a very short period of time.
It is not yet known when, and under what circumstances, a more widespread re-opening of boundaries would occur. By the next calendar year, this will result in almost zero international visitors on Indian soil. You ought to have a local response to the situation where there is a worldwide pandemic that has resulted in a complete halt of the global supply chain and transport. Therefore, the only approach to revive the tourism sector lies within the country, rather than within the small regions or geographical areas. One good aspect of this situation is that majority of tourists in India are domestic tourists which accounts for 98% of the total tourists. But we may also expect that in the near future the interstate Indian tourists are also going to be less than earlier due to some reasons as discussed earlier, such as social distancing norms and fear of spreading the Coronavirus. Similarly, domestic tourism, which accounts for around 75% of the tourism economy in OECD countries also.
We've got to be Go Glocal rather than global. In order to revive the tourism industry and the local economy, we must concentrate on the "region" basis for the next few months. There are many areas of every state that are fully dependent on the tourist industry. As the economy of this area depends on the tourism operation, all people, business houses, managers, local tourist bodies who are the stakeholders of this region have some responsibility towards the community. If tourism activity declines, it would have a cascading effect on all persons who are directly or indirectly dependent on tourism activity.
These areas are expected to take effective steps to encourage local or regional tourist destinations and to make them aware of the importance of visiting them. With the support of local administrators and the state government, local tourism bodies need to take this opportunity to improve the cleanliness and hygiene of these areas. The state government together with local tourism bodies, can play a very important role in introducing local tourist destinations to the residents of this area in order to get local or provincial people active in the industry. Public utilities and more amenities need to be spent to promote the new norms of social distancing. Together with the local administration (or State Tourism Department), local tourist bodies are required to come up with guidelines (SOP) on how to sanitize rooms, camps, and running restaurants, how to run taxis with a maximum number of passengers, trekking lodges and such related problems that will also give local residents confidence. Therefore, a detailed tourism recovery plan (localized approach) is needed to prepare all stakeholders for smooth conducting the tourism activity in the vicinity of the area for maintaining the tourism industry at the local level.
The current year is not a chance to make high profits, but a chance to survive—to restart the industry so that thousands of people affiliated with the tourism ecosystem can transcend this extraordinary moment and overcome the current situation by supporting local stakeholders before our social life and economy is returned to normalcy. The government of the tourism industry needs to help the sector with soft loans, working capital, and deferment of loan repayments for sustainable development, which is inevitable in this situation. Economic growth would start again with new social distancing standards; local tourism industry bodies and all service providers will adopt a localized solution to solve the region's difficult issues.
Conclusion:
For the tourism sector in India, it was no longer going to be business-as-usual and it needs to be redefined, refocus and change the game plan for going forward. It is essential to measure the impact of Covid-19 and prepare a good strategy involving both the government and the industry stakeholders Travel companies are working on new business plans, devising ways to engage with customers, and training staff to adapt to a post-Covid-19 business environment. The travel service industry did come up with great strategies like amazing offers, digital campaigns, collaborations, health benefits, etc. it can be seen that tourism is now moving towards technology, which will be a driver and determinant of the success of many of the stakeholders in the sector. India is uniquely placed to provide experiential tourism, which will be the hallmark of the post-Covid-19 era, considering the wealth of cultural diversity and heritage sites in the country. The tourism service sector will bounce back with a vengeance and flourish: because of the human desire to explore. It can be seen that air travel has picked up once again and with people starting to move around amidst the new normal.