FAITH Revises its Tourism Value at Risk Guidance to ₹ 15 lakh crores

75% value or minimum 9 months of the almost 10% of India’s GDP from Tourism at risk from collapse.

Federation of Associations in Indian Tourism & Hospitality, the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India & cause partner AIRDA has further revised upwards it’s value at risk to Indian tourism to ₹ 15 lakh crores.

FAITH’s first guidance which was calculated and was shared with the Government in March 2020 had put tourism’s economic value at risk at ₹ 5 lakh crores from this pandemic. FAITH revised this further during the quarter as the situation deteriorated and the value at risk was put at ₹ 10 lakh crores. This has been revised again to touch a value at risk of upto ₹ 15 lakh crores in terms of the economic output of tourism in India

Given the way the virus is progressing, tourism supply chains have broken down in India across all its key inbound, domestic & outbound markets and are not expected to recover for the next  5 months too making the total impact to a minimum of 9 months starting from March this year.

The direct and indirect economic impact of Tourism industry in India is approximately estimated at ~ 10% of India’s GDP.  This roughly puts the full year economic multiplier value of tourism in India at ~ ₹ 20 lakh crores. Minimum three quarters of tourism will be fully impacted

Be it leisure ( inbound, outbound, domestic) corporate travel, heritage, adventure, meetings incentives, exhibitions & events religious, spiritual and in upcoming high value niche tourism products such as sea & river cruises, camping, rafting, golf  film tourism, jungle tourism, agri tourism and many more across all states, this will the worst performing year for tourism in a century.

Tourism has one of the largest economic multipliers and FAITH based upon its industry estimates believes that each rupee spent on tourism could have an economic multiplier of upwards of  3- 4 times more for India given its most globally unique natural and cultural heritage spread across the Indian hinterlands. The cumulative job losses for the full year both in organised & unorganised category of tourism could go as high as 4 crores.

FAITH has been requesting over the past 5 months that for revival of any demand in tourism, it is first important that the survival of tourism businesses in India has to first remain intact.

The following are immediately critical to maintaining the survival of tourism businesses:

– A Tourism fund which can be used by tourism enterprises in India for taking care of their employees.

– A multi-year moratorium by RBI on principal and interest payments by tourism, travel & hospitalty businesses.

– An immediate full year waiver of all central and state statutory liabilities be it PF , ESi, income taxes, GST , fixed power and utilities tariffs, property , excise , inter-state tourist transportation taxes and license fees, all without any accumulated or penal interest has to be done immediately. 

– Robust booking payments refund mechanism for travel agents & tour operators from airlines, railways, state tourism parks and other suppliers. 

FAITH has already raised requests over the past five months to the Prime Minister, the Finance Minister, to each of the 28 chief ministers , to the RBI, Niti Aayog, to tourism parliamentary panel, ministries of aviation, commerce, Finance and to more than 600 parliamentarians and is closely in coordination with ministry of tourism.  

It has also requested the Parliamentarians to raise the question as to ‘why not tourism’ for sector specific support when tourism industry contributes to pan India jobs across urban & rural, forex , robust IT & GST collections, capex driven GDP & so on.

With each aspect of the travel journey now under the threat of virus from contact, this puts tourism at risk. Till the time there is a vaccine found, the very concept of tourism will be in question. 

This will be reflected in all data points of the Government whether in GST collections, banking data, PF, ESI or state level fixed charges.