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Coronavirus: Visa Suspension May Cost Rs 8,500 Crore for Travel, Tourism, Aviation

PTI |
Industry bodies foresee job losses in these sectors as companies try to tide over the situation by removing non-essential workforce and stopping recruitment.
Coronavirus: Visa Suspension May

New Delhi: The coronavirus pandemic could bring Indian travel, tourism and aviation industries to a halt within next 10 days, especially with the government suspending visas for a month, a move that could cause an immediate economic impact of at least Rs 8,500 crore, according to industry players.

Industry bodies, including Indian Association of Tour Operators (IATO), and ASSOCHAM, foresee job losses in the sectors as companies try to tide over the situation by removing non-essential work forces and stopping recruitment, while calling the government to review the decision to suspend visas for a month and allow inbound travel through limited gateway cities.

"The ban on travel to India for a period of one month will have a cascading economic impact and will lead to job losses in the entire hotel, aviation and travel sector. We estimate that it will lead to direct loss of not less than Rs 8,500 crore," IATO Secretary Rajesh Mudgill told PTI.

Assocham Tourism and Hospitality Council Chairman Subhash Goyal said since the outbreak of coronavirus, the aviation and tourism industries in India have been adversely affected.

"However, we were able to manage our expenses and keep the staff because some amount of essential travel was going on. The suspension of visas last night has come as an immediate blow to the entire tourism, aviation and hospitality industry," he said.

Warning of the consequences of the step, Goyal said, "If no visas are valid, within next ten days this travel and tourism industry will come to a virtual stop. It would mean that everyone will cut down costs and terminate non-essential staff and stop recruiting additional staff."

Federation of Hotel & Restaurant Associations of India (FHRAI) Vice President Gurbaxish Singh Kohli said, "Since November, when coronavirus made news, hotel room cancellations began and crossed the 80 per cent mark. New bookings are almost completely on hold, including the NRI segment which accounts for 60% of the tourism revenues mostly in the months from April to September."

Yatra.com Co-Founder and COO, Corporate Travel & Head Industry Relations, Sabina Chopra said the latest suspension of visas from all countries to India is expected to have a substantial impact on the foreign tourist arrival in the country which was already witnessing a drop due to the prevailing situation.

"We have received close to 35% cancellation queries from travellers planning their trip to foreign destinations," she said adding airfares to affected destinations have dropped by 40%.

Chopra further said, "There has been about 18% drop in hotel rates and we are receiving cancellation requests from various travellers who are wary of taking up trips domestically as well."

According to industry chamber CII, this is the one of the worst crises ever to hit the Indian tourism industry impacting all its geographical segments - inbound, outbound and domestic, almost all tourism verticals - leisure , adventure, heritage, MICE, cruise, corporate and niche segments.

In an impact assessment of the coronavirus pandemic, CII Tourism Committee said to save on variable costs and minimise fixed costs many small and mid-sized hotels, resorts and car rental companies are shutting down operations and asking staff to go on leave without pay.

Moreover, working capital of many corporates in tourism sector is seriously hit by almost 60 per cent and for micro, small and medium tourism enterprises by almost 80 per cent, it added.

"Most of the Indian tourism travel and hospitality companies are facing demands for full refunds and they are doing so out of their cash reserves even for which they have paid advance tax and GST," the CII assessment report added.

The report further said cancellations are "reaching a peak of almost 80% now in March in many Indian locations. The value at risk from this segment will be in multiples of tens of thousands of crores."

VFS Global Regional Group COO - South Asia, Middle East and North Africa, Americas Vinay Malhotra said, "While it is too early to comment on the impact of coronavirus on visa application trends, so far, our visa application processes in India continue on schedule as per the mandates of our client governments."

MakeMyTrip Group CEO Rajesh Magow said, "The decision by the government will have an impact on inbound and outbound international travel."

Tea exports likely to be hit

In Kolkata, tea planters and exporters are keeping their fingers crossed ahead of the new season in the wake of the coronavirus outbreak as they apprehend that the demand from overseas markets will decline and price realisation could be impacted.

Exporters are more concerned about Iran and China, the two countries badly hit by the coronavirus pandemic.

"Iran is a critical market for us. There is a concern about demand for new season tea from the Persian Gulf nation due to coronavirus outbreak. There might be a decline in demand in the short term.

"China-the epicentre of COVID-19-is a major importer of Indian black tea. Imports of the beverage from the neighbouring country are also expected to be impacted," Indian Tea Exporters' Association Chairman Anshuman Kanoria told PTI.

China imported over 13 million kg of tea from India in 2019 and is seen as a prospective market for even 20 million kg in the next two years, he said, adding that a decrease in imports from the neighbouring country will adversely hit the Assam tea industry as it mostly buys the commodity from there.

"With the coronavirus spreading at an alarming rate in China, we do not think that tea export will touch 13 million kg shipment this year," Kanoria said.

Iran had imported around 53 million kg of tea in 2019.

"Tea producers are in tension as they do not know what will happen in the overseas markets," North Eastern Tea Association's adviser Bidyananda Barkakoty told PTI.

In the recent months, shipment of pending orders have been continuing but the volume has been low as tea gardens remained closed during winter which is a lean season for the industry, Kanoria said.

He said over the last few months there have fewer fresh orders.

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