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COVID-19 OUTBREAK & ITS IMPACT

One thing is certain. There will be a disastrous impact on the industry as the spread of COVID-19 has tremendous domestic as well as international ramifications. The immediate impact is obvious and is resulting in large losses from both monetary as well as employment perspectives.

The long-term impact depends on the duration of the global lockdown and the speed at which the industry can change to come in line with the new normal.

Currently, according to WTTC estimates, 75 million jobs are at immediate risk with a staggering estimated one million people losing their jobs every single day. The research reveals a potential loss in Travel & Tourism GDP of $2.1 trillion in 2020 alone.

A study by HVS paints an equally grim picture for the Indian tourism sector with an estimated loss of Rs. 5 lakh crore (approx. $66 Billion) and 30-40 million jobs. This is largely attributed to an estimated decline of 17-21 percentage points of occupancy in branded hotels in 2020.

CII officials estimate 20 million job losses from Hotels alone with occupancies in single digits and revenue losses of 60-70 across geographies.

This has been an unprecedented crisis for the global aviation industry which was one of the first to be hit the hardest by the pandemic. Nobody seems to have any answers currently as to how to combat it.

International traffic is expected to fall from about 70 million passengers in the previous financial year to approximately 35-40 million, possibly less, in the current financial year, according to the latest CAPA report.

TRAVEL AND TOURISM INDUSTRY SHOULD ADOPT A PROACTIVE APPROACH

The tech-savvy and those willing to adopt new technology quickly to service customers will rebound faster. Low-touch or no-touch models for customer interaction and engagement will be preferred and may give rise to a new normal.

Voice-activated and facial recognition technology will be in vogue for checking in and out at hotels.

Hygiene and sanitation will be major concerns for all industries. New devices to ensure the disinfection of people, food, material, etc. are being researched for use at airports, aircraft, hotels, cruise ships, restaurants, and all other service-oriented places. This will also lead to innovation in flooring materials, wall paints, mattresses, bed linen, amongst others, which can be cleaned or disinfected easily.

There has been a significant expansion of the hospitality industry in recent years. This is going to change. Near term expansions and new developments should be postponed until a vaccine is found to treat the Coronavirus.

The safety of the people of the industry is paramount, and till the expansion should be tweaked to be in line with the new normal that emerges. Of course, longer-term expansions would have to be aligned with the economic resurgence and recovery of the global economy.

However, it is important that the hospitality, travel and tourism industry adopts a proactive approach rather than a wait-and-watch or reactive approach.

SOME IMMEDIATE SOLUTIONS:

* The review and revision of all Standard Operating Procedures needed to raise Hygiene and Sanitation standards and plans on adequately training staff new products under development can be identified that would help with this raising of standards.

* Strategizing future manpower requirements as the business will take time to normalise.

* Work out plans for how to handle future calamities - opening/shutting of rooms, restaurants, night clubs, banquets, gyms, spas, salons and other facilities in case of future calamities.

* Adoption of new technologies that would aid in social distancing e.g. facial recognition techniques for check-in / check-out of guests, use of voice-activated technology for Room and Restaurant services.

* Identify how to handle the opening of services eg, which segment of business and in what capacity you should address first on the lifting of the lockdown.

* Give priority to financial planning for management and operation of the hotel, cash liquidity being a major concern currently.

* Devise new Marketing plans and Communication strategies under the new scenario and devise a better USP for your service.

INDUSTRY'S RECOVERY

After the lockdown is lifted and airlines, road and rail transport start operating nationally and Internationally, my estimated timeline for recovery is the following:

* Business travel will start immediately but will take at least 3 months to be what was before COVID-19

* Medical Tourism will start within 30 days

* Domestic Leisure travel will start in 60 days

* International Leisure traffic will take 90 days to start

* Domestic MICE business will start in 60 days and International in 90 days

* Business will revive completely after the COVID-19 antidote is found

It's important to note that in Wuhan, the epicentre of the epidemic, domestic travel has already begun.

SUGGESTED GOVERNMENT INTERVENTIONS

* A 12-month moratorium on EMIs of interest and principal payments on loans and working capital from banks and NBFCs,

* Deferment of dues such as advance tax, GST and PF ESIC for about 12 months

* A 12 month GST holiday to the travel and tourism industry.

POST COVID-19 CRISIS

Post-COVID-19, it may take as long as 6-12 months for leisure travellers to feel reassured about visiting India. As part of the confidence-building exercises to be undertaken by the industry - propagation of the benefits of India’s natural environment, its wellness system, Naturopathy, Ayurveda, the practice of Yoga, meditation and importance of religious tourism. Promotion of Indian traditional cuisine using locally-grown seasonal ingredients, herbs, and spices which strengthen the body’s immune system.

Humanity as a whole is extremely resilient. We shall recover from this pandemic as we have recovered from any global calamity that has happened. Going forward we shall be better equipped and prepared. New innovations and technologies will change how we interact and conduct our businesses. Fundamental tasks will be redefined and redundancies will be built into SOPs. As long as we learn from our past, we shall emerge stronger as a species.

For now, though our focus needs to be on how we can best handle the safety of our people and their livelihood.

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Anil Bhandari

Guest Author The author is former CMD of ITDC and currently, Chairman of AB Smart Concepts, a firm which functions as an advisor to owners and investors and assists in concept to commissioning of hotels, transforming existing hotels and development of travel & tourism projects.

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