COVID19: HOSPITALITY AND TOURISM INDUSTRY

CONTENTS

1.0 OVERVIEW AND DESCRIPTION

1.1 INTRODUCTION

1.2 IMPORTANCE OF TOURISM TO INDIAN ECONOMY

1.3 COVID19 CHALLENGES TO GLOBAL AND INDIAN TOURISM INDUSTRY

1.4 ROLE OF AYUSH WELLNESS TOURISM POST COVID19

1.5 NEW GUIDELINES TO RESTRUCTURE TOURISM INDUSTRY POST COVID 19

1.0 OVERVIEW AND DESCRIPTION

This chapter will help the students to understand the impact of the pandemic covid19 on the
tourism industry which is the lifeline of Indian economy and is a huge market for the small-scale
industry .It will help the students to understand to:

 Need of tourism industry for Indian economy

 Symbiosis of small scale industry and Indian tourism industry
 How covid19 has changed global tourism industry
 How Indian tourism industry will cope up the challenges of covid 19

RESOURCE MATERIAL

Internet Sources

indiarefer.com;

tyrocity.com;

ETHealthWorld.com
 
ayurveda.hp.gov.in
www.hospitalitynet.org

tourism.gov.in; stdc-mongolia.org wikipedia.org/wiki/World_Tourism_Organization

REFERENCES

Ahorsu, D.K., Lin, C.Y., Imani, V., Saffari, M., Griffiths, M.D. and Pakpour, A.H. 2020. “The fear of
COVID-19 scale: Development and initial validation. International Journal of Mental Health and
Addiction, pp. 1-9.
Courtney, E.J. 2020. “COVID-19 will cause a significant decline in global RevPAR, cash flow, for rated
lodging companies”, available at: https://www.spglobal.com/ratings/en/research/articles/200311-covid-
19-will-cause-asignificant-decline-in-global-revpar-cash-flow-for-rated-lodging-
companies11382396#ID493

Hall C.M. and Stephen, J. Page, (2002), The Geography of Tourism and Recreation. Environment, Place
& Space, London: Routledge.

Hudman, E.L. and D.E. Hawkins, (1989), Tourism in Contemporary Society: An Introductory Te

India Brand Equity Foundation. (2019). Indian tourism and hospitality industry analysis. Retrieved from
https://www.ibef.org/industry/indian-tourism-andhospitality-industry-analysis-presentation

Ministry of Tourism, India (2019). Tourism statistics. Retrieved from http://tourism. gov.in/sites/default/fi
les/Other/India%20Tourism%20Statistics%20at%20a%20 Glance%202019.pdf Ministry of Tourism, India
(2019). Development of medical tourism. Retrieved from http://tourism.gov.in/sites/default/fi les/usq
%20449%20for%2025062019.pdf

Nabi G., (2000), Socio-Economic Impact of Tourism, Jaipur: Pointer.

Perlman, S. (2020). Another decade, another corona virus. The New England Journal of Medicine, 382,
760 –762. http://dx.doi.org/10.1056/ NEJMe2001126xt, New Jersey: Prentice Hall.

Punia, B.K., (1994), Tourism Management-Problem & Prospects: Delhi, Ashish

1.1 INTRODUCTION

What we anticipate in our destinations is not holiness or divine visions, but something even
more miraculous – the chance to feel different from the way we feel at home. It is as if the act
of travelling to a certain place in the world entitles us to feel happier and more alive.

(Chaline, 2002:67)

The Definition of Tourism differs source by source, person by person. There is no definite

parameter for defining tourism. Almost every institution explains "Tourism" differently. But
generally, we will sum it up as follows;

Tourism is a sum total of activities, services and industries which cater a travel experience
comprising transportation,accommodation, food and bar centres, retail shops, entertainment
businesses and other hospitality services given to individuals or groups travelling home away from
home.

UNWTO Definition of Tourism

In order to prevent the conflict to define "Tourism", UNWTO defined it as indicated below;

"Tourism may be a sum of activities of persons travelling to and staying in places outside their
usual environment for not more than one consecutive year for leisure, business and other
purposes."

UNWTO has broadly classified the tourism as:

1. DOMESTIC TOURISM: The trips made by local citizens within their own countries are
referred as domestic tourism. Example a person living in Chennai takes a leisure trip to Nainital.

2. INTERNATIONAL TOURISM: The trips taken by a person between two countries is

referred as international tourism. Example a person travel for business from India to Singapore.

1.2 IMPORTANCE OF TOURISM TO INDIAN ECONOMY

 Employment and income generation: Any form of tourism and facility need better
skilled .This is a favourable impact for any destination to create a skilled workforce base to
meet the demands of tourism industry. This leads to poverty alleviation through income of
local workforce and sustainable human development. Tourism industry contributes 6.8%
of GDP and 7.7% in total employment generated in India.(IBEF2014). The services are
very human resource intensive, such as personal services (e.g. treatments or high quality
accommodation). This can mean a higher employment multiplier than other forms of
tourism (Horvath, 1998). The investment in tourism sector creates more jobs as compared
to other sectors of economy. An investment of Rs. 10 lakh in tourism sector is estimated to
create 90 jobs in tourism industry as compared to 50 jobs in agriculture and 15 jobs in
manufacturing sector (Planning Commission, 2007).
 Foreign exchange earnings: The tourism industry is the third largest source of foreign
exchange for India (makeinindia, 2015). Market size of tourism sector was estimated to
increase from US$ 122.1 billion in 2013 to US$ 418.9 billion in 2022 (IBEF, 2014) before
covid19. In India tourism has emerged as a sunrise industry with rise in number of foreign
tourists. The international tourists are a great source of foreign exchange for the country.
For India with an adverse balance of payments, tourism plays a vital role in increasing
foreign exchange reserves. The contribution of tourism in foreign reserves has increased
from US$ 7.5 billion in 2005 to US$ 18.1 billion in 2014 (IBEF, 2015).
 Living conditions: The economic impacts have direct implications on living conditions.
Local population are positive when infrastructure like roads and sewage pipes, hospitals,
sport facilities etc are developed as the living conditions become comfortable. Popularity
due to improved infrastructure may attract more and more visitors as well as investors and
can lead to the increase of prices, which is a positive thing when locals want to sell, and
have many other positive implications(Nabi G., 2000)
1.3 COVID19 CHALLENGES TO GLOBAL TOURISM INDUSTRY

Global tourism and hospitality sector is one of the strong pillars of modern economy system.
Tourism industry is significant income generating sector for many countries in the world
similar to India. However, during a global crisis like covid19 usually tourism industry is the first
industry to take a severe hit. As per data published by the global hospitality data firm STR on
March 2020, it is occupancy rates have severely dropped nearly between 96% in the entire
global tourism industry due to the on-going COVID-19 . The industry is facing its biggest
economic challenge more severe than joined effect of 9/11 and the slowdown of 2009 and
estimated bigger effect than the Economic Depression and World War II( Ahorsu, D.K., Lin, C.Y.,
Imani, V., Saffari, M., Griffiths, M.D. and Pakpour, A.H. 2020)

The worst impact of the covid19 pandemic on global tourism industry are;

 50 million jobs that could be lost, around 30 million would be in Asia, seven million in
Europe, five million in the Americas and the rest in other continents due to COVID-19
pandemic, which has adversely affected travel like no other event in history and caused 96
per cent of all global destinations to impose restrictions in response to the outbreak, the
World Tourism Organisation(UNWTO)
 Present global tourism scenario identifies four key types of restrictive measures, namely
complete or partial closure of borders to tourists, destination-specific travel restrictions,
total or partial suspension of flights and different measures, including requirements for
quarantine or self-isolation, medical certificates, invalidation or suspension of visa
issuances. (Courtney, E.J. 2020).

 Lockdown of three months of global travel in 2020 could lead to a cut down in jobs

between 12% to 14% as per WTTC. (Courtney, E.J. 2020)

 Once the pandemic is over, it could take up to 10 months for the industry to recover.(Courtney, E.J.
2020)

1.3 COVID19 CHALLENGES TO INDIAN TOURISM INDUSTRY

In 2018-19, Indian tourism industry produced a business of over 10.5 million foreign tourists,
more than five million visiting NRIs, 1.8 billion domestic tourist visits and over 26 million
outbound travellers. This industry employs an estimated 3.8 crore jobs. (Perlman, S. 2020).
The worst impact of the covid19 pandemic on Indian tourism industry are;

 Hotel room occupancies across India dipped 67 percent by March 21, 2020 (three days
before the three-week nation-wide lockdown was announced) according to research firm
STR.
 Earnings from the industry dropped even sharper and by March 21, 2020 revenues pulled
down 73 percent, as against 20 percent recorded on March 7, 2020 as earnings from food
and beverage and events took a hit from the pandemic.
 Out of all the segments of the hospitality industry, the Meetings, Incentives, Conferences
and Exhibitions (MICE segment) has been badly hit the most. Some of the big
international business events have been cancelled including tech events such Mobile World
Congress (MWC), Google I/O, and Face book’s F8 event, which has caused heavy
economic losses.
 Massive scale cancellation of travel plans by both foreign and domestic tourists, there has
been a dip in both inbound and outbound tourism of about 67% and 52% respectively since
January to February, 2020 as compared to the same period last year.
 Due to corona pandemic nearly 90% bookings of hotel and flights for the peak time have
been cancelled. Cruise bookings for destinations such as Thailand, Singapore and Malaysia
have also been cancelled by tourists in large numbers.
 As per the Indian Association of Tour Operators (IATO), the hotel, aviation and travel
sector together may incur loss of about Rs 8,500 crore due to travel restrictions imposed on
foreign tourists by India for a month. This will have a negative impact on jobs in the
industry.

1.4 ROLE OF AYUSH IN WELLNESS TOURISM POST COVID19

In India, wellness is a concept which has been in relevance and practice since ancient times.
Traditional medicinal and healing practices like Ayurveda and yoga have created the concept of
mental and bodily wellness. Most of the old wellness practises have largely focused on the basic
needs of an individual within the need hierarchy, namely a focus on health, nutrition and
relaxation.

There has been a wake-up call to the global population that it is time to give their health, priority.
A direct result is that most people have engaged in some or the other form of physical activity to
achieve fitness and maintain high energy levels that goes with success. Adjacent industries such as
retail, healthcare, hospitality, among others, are embracing wellness as part of their value
proposition, opening up huge opportunities to a lucrative future.

The wellness tourism industry in India has evolved rapidly from its budding unstructured
beginning in the early 1990s to a extensive ecosystem today. This ecosystem is made up of
tourists, providers, adjacent industries, facilitators and the Government. While the tourists mainly
consists of generation Yor called the millennial market segment with rising income levels and the
strong desire to look and feel good, which has led generation to seek wellness solutions to meet
lifestyle challenges, the Providers offer wellness services and products to meet the hygiene,
curative and health rejuvenation needs of the consumer. The Adjacent industries, such as
healthcare, media, retail, gaming, hospitality and education capitalize on the growth of the
wellness tourism sector to create additional revenue streams, while the Facilitators, comprises
employers, insurance companies and schools, who will be catalyst in encouraging and imbibing
pro-wellness habits among tourists to move forward. The last but not the least, the Government
wears multiple hats in its roles as a provider, facilitator, enabler, and important platform and
backbone for the industry.( Ministry of Tourism, India 2019).

Some of the key industry trends in this sector include:

 The growing wellness tourism industry has attracted a large number of domestic entrants
and international players. Present government has given an entity to traditional medicine
through the formation of AYUSH (ayurveda, yoga, unani, siddhi and homeopathy)
department. Guidelines are focussed to raise standard of this alternative healing therapy to
be globally accepted,
 International brand players are achieving revenue maximisation through product and
service diversification and are attracting new global and domestic tourist market segment.
 Companies are actively seeking public and private equity investments to catapult Indian
wellness tourism market.
 While there is strong optimism about future growth prospects, in the scenario of covid19
Ayurveda and yoga have proved their mettle to have great healing and immunity boosting
power. The world now has shown great respect and faith in the ancient healing method of
ayurveda.
 There exists an opportunity for micro-segmentation to develop the commercialisation of
traditional Indian home remedies as it has great advantage of long lasting recovery, less
side effects, on surgical and a wonderful health rejuvenator.

1.5 NEW GUIDELINES TO RESTRUCTURE TOURISM INDUSTRY POST COVID 19

The Federation of Associations in Indian Tourism & Hospitality (FAITH), the federation
representing ten entities in the tourism, travel and hospitality
industry(ADTOI,ATOAI,FHRAI,HAI,IATO,ICPB,IHHA,ITTA,TAAI,TAFI) has appealed for
an relief package from the government to survive the pandemic. There is already one quarter of
accumulated losses in the lockdown period. There is no cash flow expected in the FY 20-21as the
tourism industry has come to standstill due to the impact of covid19.

Suggestions

 The removal of fixed central and state statutory and banking liabilities without any penal

or compounding interest for any upcoming licenses and permit renewal for the hospitality

and travel industry across states. Hotels pay a hefty bar license in addition to many taxes

like property taxes. The validity period of these taxes and licenses be extended by at least

one year without further payments.

 A twelve months of complete waiver of all statutory dues whether GST, Advance Tax, PF,

custom duties, excise fees, water and power charges, licenses, bank guarantee across

hospitality, travel & aviation industry.

 Government needs to give momentum to domestic tourism by giving 200 percent lowering
of expenses to Indian corporates for undertaking their meeting, conferences, and
exhibitions (MICE tourism) in India. LTA like income tax exemption of up to Rs 1.5 lakh
to Indians for promoting domestic tourism.

# TIPS TO HELP TOURISM AND HOSPITALITY INDUSTRY OVERCOME THE

CHALLENGES OF COVID19

SARS virus affected the tourism industry drastically in 2003. There was a 50% fall in hotel
bookings, which led to a drop of nearly 9.6 million in international tourist arrivals, with losses
estimated at between $34 billion and 53 billion. Despite such setbacks, the global tourism industry
managed to register immense growth by 2006, with a total contribution of $5,165 billion to the
global GDP within the year.The fact is that Covid19 pandemic is temporary and shall pass. Thus,
we should design plan for the future, as well as take steps to lower long-term damage from corona
virus and drive faster recovery.

Here are some tips to help tourism and hospitality industry to overcome the challenges that
COVID-19 brings.

# Target the millennial travellers: Millennial are that segment of tourists that is most eager
to travel again and explore the world after the corona virus ends. No doubt, they are
 stressed about the outcome of the COVID-19 pandemic. Yet, they are more fearless and
looking for unique experiences right here right now. Millennials are expected to be the
first to start traveling once the restrictions are relaxed. Thus, the tourism industry must
formulate strategies to attract them and include them as an important step in the business
recovery plan. 
# Use cloud based technology: Hoteliers can manage all the hotel operations without even
being present at the workplace. Adopting cloud-based Property Management Systems,
they are able to co-ordinate all operations at anytime from anywhere.
# Utilize the time for hotel renovation and re-decoration: It’s a perfect time for pending
property improvement plan or spontaneous renovation as the hotels are empty. It’s a time
for deep cleaning, everything that needs attention to be repaired, make an inventory of
maintenance supplies, laundry room systems check, railings and balcony checks,
elevators, life safety checks, pool systems, ensure all lights are off, etc.
# Focus on food delivery from hotel restaurant: Hoteliers can increase their sales by
delivering food from their restaurants and through marketing campaigns stressing on food
hygiene can continue their income and keep the restaurant active.
# Hoteliers should implement proper health and safety measures, which may include the
following:
 Self service pay system
 Orders through mobile apps
 Non-contact service and order deliveries
 Complimentary hand-sanitizer stationed at the entrances and exits
 Suspension of unnecessary work-place gatherings
 Readiness to deal with staffing reductions