Tourism- A Ray of Hope?

“All indicators are positive for calibrated reopening of international travel”—this recent statement of the Tourism Secretary must have come as a ray of hope for the beleaguered tourism industry.

When in March 2020 the country had gone into a complete lockdown, bringing tourism to standstill, the gravity of the situation had not yet completely sunk in. There was hope that like the SARS, it will pass. Soon the worries deepened to apprehension and in no time became a trauma of catastrophe. It was much beyond the control of the industry and much beyond what the industry composed of 80-90 per cent of SMEs could withstand on its own. Therefore, the industry, largely self-dependent in normal times looked desperately to government for help—for survival. 

The demands of the industry were mostly related to micro- management - liquidity support in the short run, deferment of interest payments, statutory fiscal liabilities, GST, utility costs to be charged on actuals, credit guarantee support, waiver of annual license fee for the period just to mention a few. Some of them were within the competence of the Central government, others with the State governments and all of them were eminently justified and easily doable. In fact, the Minister Tourism in his many interactions with the industry appreciated the importance of resolving these issues and perhaps tried to facilitate. Yet, as the industry is now looking for revival it feels that during this gloomy period nothing much happened by way of relief. Whatever happened were scattered and piecemeal and not uniform for the whole country. The response of the government to the problems of the industry was not fast enough.

Tourism industry was looking to the national economic recovery programmes announced by the government with great hope but again the specific problems of the tourism sector remained unaddressed. Tattered and bruised, the industry or whatever of it that has been able to withstand the storm so far was looking for revival to start and pinned its hope on the budget announcements. The budget has been lauded for its focus on economic development, but tourism and hospitality industry again find itself left in the lurch.

No doubt, as the tourism secretary and many others have pointed out many of the infrastructure development investments will indirectly or directly benefit tourism also. However, such investments have a gestation period and the effects on tourism will be largely indirect. The industry gasping for breath needs immediate succor. Given a will, such relief, ironically is possible. It is heartening, in that context to note that the CEO of Niti Aayog reportedly told the recent ITM that relief measures for tourism and hospitality sector need not necessarily flow from the budget and they can be provided in the normal course of government action. Taking a cue from that tourism industry will be keenly looking forward to some favourable measures to kick start the revival process.

The starting of international travel as mentioned by the tourism secretary will be one step towards the revival process. But, as he has indicated, it will start in a small measure and will be a small push for the time being dependent on many imponderables.  The big push and the more immediate one to happen will come, as has been often talked about, from domestic tourism. Revival will be faster if the government, considering the very unprecedented circumstances in which the industry is placed takes proactive measures to facilitate growth of tourism. The biggest casualty of the pandemic has been public confidence. Therefore, measures to boost confidence should be at the top of the agenda. Luckily, the start of vaccination has been a very big step forward though there is much more to be done still.

Government will have to ensure that the SOPs for health and safety are harmonized among the states and among different government agencies responsible for their implementation. Reopening of domestic tourism and tourism related services experienced bottlenecks due to conflicting SOPs of different states.

Secondly, a pragmatic PPP initiative will have to be evolved to ensure that all the service providers like the hotels, restaurants, the transport providers, tour operators, travel agents and others are in sync to create that atmosphere of confidence. Third, in the initial stages the PPP measures should include practical incentives both for travellers and the service providers for safe travel. Foreign exchange incentive schemes like SIES should be remodeled and introduced. Fourth, the much-needed relief for the tourism industry should be provided without further delay so that the service providers can be on their feet to make tourism happen.

The disaster that happened in the form of COVID-19 can happen again, maybe not in the same scale or intensity. The experience of past year has shown that while the disaster management protocol takes care of the health, safety, relief and rescue needs, the specific economic survival problems of tourism industry must be handled by a specific sector strategy. Perhaps it is time to collate the lessons of this pandemic and see if some such plan for automatic disaster management response for the sector which also provides insurance and social security umbrella and income and liquidity support to the most vulnerable sections of the industry could be devised.

We have been aware of the impact of the pandemic on thousands of hotels, restaurants, tour operators, transport providers and the picture is grim. We have not yet realized the impact on millions who indirectly depend on tourism and hospitality for their livelihood. It is said that of the thirty odd core activities that make tourism only five or six are visible. The ripple effects throughout the economy are often not captured in statistics. As a result, the policy makers do not fully realize the economic significance of tourism. It is reported that the Ministry of Tourism is trying to assess the full impact of the pandemic on total employment and livelihood in tourism related activities. Such an exercise is very urgently needed to establish the importance of the sector in the national economy enabling it to get the recognition it deserves.