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The tourism sector has been badly hit by the pandemic. According to data provided by the United Nations World Tourism Organisation, there is an estimated reduction of 58% to 78% in tourism numbers across the world. The number of foreign tourists being 24.72 lakh in 2020 saw a footfall of nearly 3.89 lakhs starting from January to May this year in India. Analysis done by CNN- News18 showed that there was a rise of 2% in Foreign Tourist Arrival (FTA) during the first five-six months of 2018 and 2019. But this turned into a 46% fall in the later months and gradually fell by 84% from 2020 to 2021 May.                

Impact on Travel agencies

The tourism industry consists of hotels, travel agencies, and operators and it is estimated that they are running at a loss of 1.58 lakh crore. The World Travel and Tourism Council has made a prediction that nearly 14% of the jobs in this industry are at a risk which accounts to 50 million jobs. The agencies are trying their utmost to adjust to the new normal. They are also offering a number of facilities Such as Customised trips with proper hygiene assistance, trip cancellations with refunding, and maintenance of Covid-19 guidelines.

Hotels and stays running at a loss

Hotels, lodges and homestays are the tourism industry. They are suffering huge losses. Popular travel websites like Trivago and Trip.com have also complained about the losses that their businesses have incurred. Details provided by trip.com showed a 50% cut in their revenue for 2020. Moreover, a popular group of hotels like Marriott witnessed a 60% drop in revenue and they closed 7300 hotels worldwide with 1000 of them only in the US.

Drop in Foreign Exchange

For the past few years, India was gaining in Foreign Earning Exchange (FEE) indicators. Since 2010, FEE indicators have been steadily increasing. However, FY 2020 saw a huge fall due to the pandemic as the earnings were 76.3% less than that of 2019. The tourism industry is also considered as the third largest export industry after chemicals and fuels. It is suspected that the earnings of export from the tourism industry decreased by 910 billion dollars - which accounts to a fall in GDP by 1.5% to 2.8%.   

Domestic Travel is showing a ray of hope. The pandemic has imposed a number of restrictions in travelling overseas or planning international tours. Airlines have been closed, foreign tourists were totally prohibited for three to four months and visa rules tightened. Though all these restrictions are slowly being lifted, the tourism industry is yet to find its pace. Most people are focusing on domestic tours.

Basant Gurung, President of Tourism Association of Sikkim, spoke to BE regarding their tourism industry. He stated, “From homestay owners to taxi drivers and tea stall owners, the pandemic has affected each and every one related to tourism. Since 2020, everything was in a pause and it has been just one month since people have started travelling again, thanks to the festive season. People generally choose places like Sikkim and Darjeeling when they opt for domestic tourism and now that there are restrictions in flights and trains, people are more tending towards these destinations.”

According to a report by McKinsey, travelling to domestic destinations in the US has increased to 90% in recent times. Reports by an aviation consultation firm informed that the damage done to international traffic in India is expected to improve only by 35%-40% in this year whereas the surge in domestic tourism is expected to increase by 70%-80% in the financial year of 2021-22. Proper utilisation of this market will ensure good revenue and will help the tourism industry to bounce back in the coming years.   

Recovery

The countries are slowly picking up the restrictions imposed on travelling both inbound and overseas. The tourism sector is reopening its wings with new marketing strategies and plans to revive and thrive again in near future. On this note Indiver Rastogi, President of Global Business Travel, Thomas Cook (India) Limited & SOTC informed BE, "The festive season and easing of travel restrictions/protocols has created a significant surge in travel demand from India and we have witnessed a noteworthy uptick in flight bookings especially from Mumbai, Ahmedabad, Delhi and Kolkata for the Dussehra-Navratri-Durga Puja extended weekend.  Coupled with the strong demand, the current constraint of limited supply/capacity has created a spike in air fares - of approximately 30% to Maldives and 10% to Turkey.  With the allure of the Dubai Shopping Festival (DSF) and the Christmas-Year end vacation period, Dubai heads the list of favoured flight routes for us. Egypt, Russia, Switzerland, France and the UK appear strongly on the radar with positive announcements on vaccine acceptance and no-quarantine.”