Key recommendations by ICC to contain COVID-19 impact on Tourism & Hospitality

April 6, 2020


Travel and tourism alone accounts for 9.2% of India’s GDP (2018). The tourism sector generated 26.7 million jobs in 2018. The cascading effect of the corona virus has the capacity to cripple the Indian tourism and hospitality industry at an astonishing pace.


The recently published statistics by Ministry of Tourism, Government of India also highlights that Foreign Tourist Arrivals (FTA) are down by 67% annually in the January-March quarter, while domestic tourists notched a much lower figure at about 40%.


FTA in February, 2020 has dropped by 9.3% month-on-month and 7% year-on-year, according to government data. In February 2020, there were 10.15 lakh FTAs, against 10.87 lakh in February 2019 and 11.18 lakh in January 2020. The situation is getting more difficult as India has announced suspension of all tourist visas till April 15 in a bid to contain the spread of the virus.


The Archaeological Survey of India (ASI) has 3,691 sites registered with it, of which 38 are world heritage sites. As per information provided by the ASI, the total revenue from ticketed monuments was Rs. 247.89 crore in FY18, Rs. 302.34 in FY19 and Rs. 277.78 crore in FY20 (April-January). If the scenario fails to change by May, which is when domestic travel is at its peak because of the summer vacations, employment may then become a concern.


Disruption due to corona virus could result in 18-20 per cent erosion of nationwide occupancy across the hospitality sector, and 12-14 per cent drop in average daily rates (ADRs) for the entire 2020. The hospitality sector is also likely to be impacted by large-scale cancellations and drop in room rates.


Most of the tourism companies afflicted by Corona virus Pandemic are now anxiously looking for interim relief to pay EMIs, installments, taxes, and salaries to employees for at least six months.


Keeping the above in mind Indian Chamber of Commerce (ICC) has made some key recommendations to the government. Briefly, these are:


  • 6 to 9 months' moratorium on all principal and interest payments on loans and overdrafts

  • Complete GST holiday for tourism, travel and hospitality industry for the next 12 months

  • Easing of the working capital crunch faced by the tourism industry

  • Setting up of a “Travel & Tourism Stabilization Fund” with direct benefit transfer to each unit to prevent financial loss and consequent job loss.

  • Removal of fees for any upcoming licenses, permits renewal, excise exemption


ICC is also urging the Ministry to provide funds from the MGNREGA scheme to support the salaries

of employees in the industry.


ICC also thinks that if a proper strategy action is chalked out and both Public and Private sectors work in camaraderie, the Tourism & Hospitality Sector would definitely spring back and provide much needed respite to the entire economy.

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