The Federation of Associations in Indian Tourism & Hospitality (FAITH), the policy federation of all the national associations, has revised tourism value at risk guidance to ₹15 lakh crore.
FAITH’s first guidance, which was calculated and shared with the Centre in March put tourism’s economic value at risk at ₹5-lakh crore from this pandemic.
FAITH mentioned that it had to revise the figure further as the situation deteriorated and the value at risk was put at ₹10-lakh crore. This has been revised again to touch a value at risk of up to ₹15-lakh crore in terms of the economic output of tourism in India.
FAITH is of the view that the way the virus is progressing, tourism supply chains have broken down in India across all its key inbound, domestic and outbound markets and are not expected to recover for the next five months. This makes the total impact to a minimum of nine months starting from March this year.
The direct and indirect economic impact of the tourism industry in India is approximately estimated at ~10 per cent of India’s GDP.
This roughly puts the full-year economic multiplier value of tourism in India at ~ ₹20 -akh crore. Minimum three-quarters of tourism will be fully impacted, FAITH noted.
This value covers the whole tourism value chain from airlines, travel agents, hotels, tour operators, tourism destinations restaurants, tourist transportation, tourist guides.
Each of these segments of tourism is non-performing or underperforming and will stay that way for many months of this year, FAITH informed.
The cumulative job losses for the full year both in an organised and unorganised category of tourism could go as high as 4 crore.
According to FAITH, the deterioration is evident across all segments of tourism. This includes pending refunds for travel agents, shut down or vacant hotels and restaurants, empty or locked down conventions and meeting or wedding halls, no order pipelines for tour operators, tourist transport lying locked in parking lots, laid off, and leave without pay staff, among others.
Tourism has one of the largest economic multipliers and FAITH, based upon industry estimates, believes that each rupee spent on tourism could have an economic multiplier of upwards of 3- 4 times. This works well for India given its most globally unique natural and cultural heritage spread across the Indian hinterlands.
The organisation believes that tourism cannot be treated economically like any other business and a fiscal and monetary structured package is needed to revive the industry.
FAITH fears that the whole value chain of Indian tourism will be under threat — which caters to almost 10.8 million incoming foreign travellers, almost 1.8 billion Indian domestic tourism visits.