With more than 4 million cases in the world, COVID 19 has a deep impact on the Travel Industry in India as well as the travel industry of the world. Analysis of the effects provide some light on India’s overall pandemic-related effects on economy. Economic activity has been halted and has affected both consumer and investment due to steps taken to contain domestic restrictions for twenty-one days, and the complete lock-up of states.
Whereas, except in a few sectors, Indian companies may be able to isolate themselves from an outbreak of global supply chains due to a relatively smaller dependence on intermediary imports, their export to infected countries in Covid-19 is affected severely.
Key Effects on Travel Industry
- Having cancelled international and domestic travel, demand for fuel will decrease substantially. The pandemic’s impact on Indian aviation and tourism industry are analysed here.
- The hotel, aviation and travel sector can together suffer losses of approximately EUR 85 billion as a result of restrictions on tourism imposed on foreign tourists, the Indian Association of Tour Operators (IATO) estimates.
- Exit and incoming journeys to India will be very low.
- The impact on white and blue collar jobs is most likely to be felt.
- In the WTTC, the crisis is estimated to cost at least USD22bn in the tourism sector, with the travel sector decreasing by 25% in 2020 and the loss of 50 million jobs. The crisis is expected to increase by 20percent.
- The global loss in passenger traffic in 2020 is estimated at between US$ 63 billion (11 percent) and US$ 114 trillion (19%), as defined in the International Air Transport Association (IATA).
- Because of Covid 19, there is a potential unemployment rate of about 38 million in the Indian tourism industry, which represents approximately 70% of the entire workforce.
- The Council of the World Travel and Tourism has warned that the pandemic of COVID-19 could cut the global tourism and travel industry by 50 million jobs. The worst affected is expected for Asia. Once the outbreak has ended, the industry can recover up to 10 months. At present, 10% of the world’s GDP comes from the tourism industry.
- In the global tourism and travel sectors the Coronavirus epidemic poses risk of up to 50 million jobs, and travel is set to decrease this year, according to the World Travel and Tourism Council (WTT Council) as the main continent of Asia.
- This influence could still be exacerbated by recent restrictions such as those taken by the US administration when traveling to Europe. This effect is dependent on how long the epidemic continues to last.
Some actions do not benefit, and can lead to a far greater economic impact. Such policies were too generic to contain the virus and were not proven effective. Such restrictions could make medical experts travel and the provision of medical supplies more difficult. Every month approximately 850,000 people travel from Europe to the United States, which is equivalent to a monthly contribution of US$ 3.4 billion to the US economy.
Empty chairs are seen on a tourist-powered beach in Phuket amid fear of coronavirus. The WTTC said, also calling on the governments to delete or simplify visas, lower travel taxes and introduce incentives once the epidemic is controlled. It also stated that the reduction of employment between 12 percent and 14 per cent could be equivalent to a loss of 3 months of global travel in 2020.
Flexibility in this sector was also encouraged so that travellers could postpone their plans and not cancel them. The tourism industry might take up to 10 months to recover from the shock from coronavirus. According to the official, airlines and cruise ships are more affected by the sector than hotels. 10% of global GDP and jobs are in the tourism industry.
In order to prevent the outbreak, but in specific targeted areas only, or in certain age groups the WTTC official advocated containment of certain cities, as is happening in Italy and Spain at the moment. It would take up to 10 months for the tourism industry to return to its normal level once the outbreak is controlled.