IMPACT OF CORONAVIRUS ON HOSPITALITY AND TOURISM INDUSTRY

Coronavirus is spreading throughout the world at an alarming rate. According to a study 3.8 crore people are jobless. Which is 70% of the workforce of the tourism and hospitality sector.

The Federal Association in Indian Tourism and Hospitality (FAITH), has urged the employees to support the workers by creating a support fund for twelve months to provide necessities and salaries of the workers.

It is believed that out of 70% around 5.5 crore people would be unemployed. The total loss faced by the hospitality and tourism industry is estimated to be 5 lakh crores. The hotel chain alone would have an estimated loss of 130-155 crore loss which accounts for 27% to 32% erosion of profits from last year.

The business for these industries saw a recovery in January whereas, in mid-February and March, there was a slide in this sector. The FAITH is urging the government to cut GST for this financial year for the tourism industry.

They are also asking the government to have a relief package fund to revive the tourism and hospitality industry. The availability of collateral-free credit options needs to be made available for the tourism industry for its survival.

The hospitality industry suffered the most in march as many events were cancelled, corporates events and bookings were called off and vacation bookings dropped steeper. There has been a significant reduction in accommodations in two-tier and three-tier hostels as well.

Till April 14 2020 the borders are sealed and all international flights are suspended. Thus, there are not many international client accommodations. Moreover, many companies have work from home schedules thereby reducing corporate travels.

Over 95% of the hospitality industry is owned by Bed and Bath (B&B), guest houses account for a loss of 130-155 crores. Additional loss in revenue across alternative accommodations is up to 420 to 470 crores.

The tourism industry contributes to 10% of India’s GDP which is equivalent to $275 billion and this might have a huge fall if the COVID 19 situation does not improve in the second quarter.

Most of the branded hotels have almost 15-25% of staff hired on a contract basis of which almost 10% of the workers might lose their job. Online travel agencies are expected to suffer a loss of 4,312 crores, tour operators are expected to have a loss of 25,000 crores, adventure tour operators are expected to suffer a loss of 19,000 crores and cruise tourism, a loss of 419 crores.

Several hotels are providing rooms for a heavily subsidized rate to accommodate hospital staff and provide their kitchens to prepare meals for them. The hotels are reporting excessive losses, but to remain functional many hotels are providing rooms to quarantine those who have returned from abroad.

The deputy manager of Lemon Tree Hotels Ltd Rathan Keshwani in collaboration with the Delhi Government has agreed to accommodate and quarantine those who have returned from abroad.

This is also a way of showing how the hospitality industry is showing its social responsibility to combat this virus.