The outbreak of COVID-19 presents the tourism sector with a major and evolving challenge. While the full extent of the outbreak’s economic ramifications is still unknown, India’s tourism and aviation sector has been one of the first few industries to be hit. If media reports are to be believed, this crisis is a greater threat than 9/11 and the financial meltdown of 2008-09 and India’s tourism and aviation sector faces the peril of its very survival.
The World Travel & Tourism Council (WTTC) expects the crisis to cost the tourism sector at least USD22 billion, with the travel sector anticipated to shrink by up to 25 per cent in 2020, resulting in a loss of 50 million jobs.
The World Tourism Organization (UNWTO) foresees international tourist arrivals declining by 1 to 3 per cent in 2020 globally, translating into an expected loss of USD30 billion to USD50 billion in international visitor spending. Of this, Asia Pacific is expected to be the most affected region with a decrease of 9 to 12 per cent in international tourist arrivals in 2020, down from growth of 5 to 6 per cent forecast in early January. According to International Air Transport Association (IATA), 2020 global revenue loss for the passenger business is expected between USD63 billion (11 per cent) and USD114 billion (19 per cent).
Closer home, travel and tourism contributes to around 8.1 per cent to India’s employment, or 42.7 million jobs. As per KPMG assessment, it is expected that about 10 to 15 per cent of these jobs will shrink. Four of the top 10 countries (China, Germany, the U.S. and the U.K.) that contribute to about 65 per cent of foreign tourist arrivals (FTAs) in India feature among the top 10 countries reporting the maximum COVID-19 cases. Similarly, the top states contributing to domestic tourism both in origin and destination are impacted. These states include Maharashtra, Kerala, UP, Rajasthan, Gujarat and Tamil Nadu. The focus needs to move to encouraging domestic tourism since international tourism will also depend on multiple factors.