Federation of Associations in Indian Tourism & Hospitality (FAITH) says the Indian tourism industry has gone into a state of disbelief and shock. The industry was looking forward to deep set of survival measures for tourism from the ₹20 lakhs crore package announced over 5 days, which however were not addressed.
The Indian Tourism, Travel & hospitality is believed to impact almost 10 per cent of GDP through its direct and indirect impact. It has already seen over one quarter of accumulated losses which began from February onwards. There is no cash inflow expected for many quarters over FY 20-21 as the key segments of the Indian tourism economy will be down. The international inbound tourists, inbound and VFR – (visiting friends and relatives) and the outbound travel will remain mostly non performing due to international flight restrictions & tragic impact in most key markets tourism markets of India.
The meetings incentives exhibitions & events segment will be severely impacted due to meeting size restrictions. Consequently, all tourism service providers, the hotels, travel agents, tour operators tourist transporters, restaurants, guides will be compromised and the tourism industry of India will be operating with extreme under capacities making most tourism businesses unviable on a cash operating basis.
To prevent this and to ensure survival, FAITH had proposed a dedicated interest and collateral free long term fund for paying salaries & operating costs and for a minimum of 12 months of complete waiver of fixed central & state statutory and banking liabilities without any penal or compounding interest which have not been addressed. The proposed MSME fund with its many underlying restrictions may have a very limited usage.