FAITH revises risk guidance, fears 4 crore job losses

The Federation of Associations in Indian Tourism & Hospitality (FAITH), the nodal federation of all the national tourism associations, has revised the sector’s economic risk guidance to ₹15 lakh crore in view of the coronavirus situation.

In its initial guidance, which was calculated and shared with the industry and the Central government in March, the federation had put the tourism sector’s economic risk at ₹5-lakh crore due to the pandemic. Later, it was revised upwards to Rs 10 lakh crore, as the situation worsened.

Now, the figure has been further revised to ₹15-lakh crore as the pandemic continues to ravage the sector.

FAITH is of the view that the way the virus is progressing, tourism supply chains have broken down in India across all its key inbound, domestic and outbound markets. This situation is not expected to recover for the next five months at least.

The direct and indirect economic impact on the tourism industry in India is approximately estimated at ~10 per cent of India’s GDP. This roughly puts the full-year economic multiplier value of Indian tourism at ~ ₹20 lakh crore.

This value covers the whole tourism value chain right from airlines, travel agents, hotels, tour operators, tourism destinations restaurants, tourist transportation and tourist guides. Each of these segments of tourism is non-performing or underperforming and will stay that way for many months of this year, FAITH observed.

The cumulative job losses for the full year, in the organised and unorganised categories of tourism may end up as high as 4 crores, the federation warned.

The deterioration is evident across all segments of tourism. This includes pending refunds for travel agents, vacant hotels and restaurants, empty or locked down conventions and meeting or wedding halls, poor order pipelines for tour operators, tourist transport lying locked in parking lots, laid off employees and the staff on leave without pay staff, among others.

Tourism has one of the largest economic multipliers and FAITH, based upon industry estimates, believes that each rupee spent on tourism could have an economic multiplier of upwards of 3-4 times. This works well for India given its unique cultural heritage spread across the Indian hinterlands.

The organisation believes that tourism cannot be treated economically like any other business and a fiscal and monetary structured package is needed to revive the industry. FAITH fears that the whole value chain of Indian tourism is under threat, which caters to 10.8 million incoming foreign travellers and 1.8 billion domestic tourists per annum.