The Tourism Sector is Likely to See 100 Million Job Losses Globally

With borders sealed, regular transportation stalled and countries under lockdown to contain the spread of the COVID-19 virus, the travel industry has come to a standstill. More than the lack of liquidity being faced by the sector, it is the spectre of job loss that is hounding the stakeholders.

The World Travel and Tourism Council (WTTC) has said that the travel sector faces a staggering 100 million jobs losses due to the coronavirus pandemic, with the number increasing by over 30 per cent in the past four weeks.

Speaking at the just concluded (virtual) Extraordinary Tourism Ministers&rsquo Meeting of the G20 countries on April 24, held under the presidency of G20 Saudi Arabia, Gloria Guevara, WTTC President & CEO, said, &rdquoTravel & Tourism is the backbone of the global economy. Without it, global economies will struggle to recover in any meaningful way and hundreds of millions of people will suffer enormous financial and mental damage for years to come.&rdquo

The picture is no less grim for India.

Back home, according to reports, nearly 53,000 travel agents, 1,15,000 tour operators (inbound, domestic, outbound), 15,000 adventure tour organisations, 2,700 MICE, 19,11,000 tourist transporters, 53,000 hospitality and 5 lakh restaurants in India face problems of job loss and cash flow. With no immediate signs of recovery, even after the lockdown is lifted and travelling is permitted, the federations of stakeholders have begun to approach the Government of India with suggestions that are likely to alleviate their woes.

Soon after the lockdown, the Hotel Association of India (HAI) wrote to Prime Minister Narendra Modi to apprise him about the problems faced by the hotel industry and requested relief measures. The HAI pointed out that the hotel industry is not only a direct large-scale employer but also creates plenty of job opportunities among the support sectors. Some of their key suggestions included deferment of statutory liabilities to a minimum of 12 months at different levels, government subsidy for employee salaries, GST collected to be used as working capital for six months, etc.

The Federation of Associations in Indian Tourism & Hospitality or FAITH, the policy federation of all the national associations representing the tourism, travel and hospitality industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) has also echoed the concerns of HAI and others, laying emphasis on the lack of cash flow and job loss. They have forwarded their suggestions to the prime minister as well as to different central ministries, to Niti Aayog, the Parliamentary Committee on Tourism and the Reserve Bank of India. FAITH not only reiterated many of HAI&rsquos suggestions but also added that a support fund should be set up by the RBI or the ministries of Finance or Tourism to support salaries and establishment costs. 

The organisation has also suggested the setting up of a National Tourism Task Force with legislative powers on the lines of the GST Council and other financial measures for the revival of Indian tourism and tourism exports. FAITH has also asked the central government to do a rethink on the Tax Collected at Source (TCS) provision applicable on overseas travel packages sold by travel agents proposed in the latest union budget.

The need to have a plan to rebuild the sector after implementing a survival plan to mitigate effects of COVID-19 on people's lives and business was also reiterated by the tourism minister of Saudi Arabia, Ahmed Al Khateeb at the G20 tourism ministers' meeting. He said the meeting expects to provide a collective response that would look into the needs of all kinds of businesses, from global conglomerates to micros, small and medium enterprises.

Incidentally, UK's tourism minister Nigel Huddleston said at the meeting that apart from introducing a retail, hospitality and leisure cash grants scheme, his country has already implemented several plans that will also support the tourism industry, such as deferral of VAT payments for firms, &pound330bn worth of government backed and guaranteed loans, a job retention scheme where employers can apply for a government grant to cover 80 per cent of workers&rsquo salaries a scheme to support self-employed workers, etc. The UK minister also said that they have also launched an emergency fund to support local tourism management organisations through this period.

Although the Indian tourism sector is awaiting the government&rsquos response and measures that are likely to be adopted to boost the travel and tourism industry, one cannot deny the importance of this particular industry in repairing the economic disruption that is coming up in the future. To quote Zurab Pololikashvili, Secretary-General of UNWTO (World Tourism Organisation), &ldquoTourism must be recognised as a key pillar for building a better future in all world regions. Past recoveries prove that the importance of our sector cannot be overstated.&rdquo