India’s Covid-19 tourism slump is putting over 85 million jobs at risk

Adjusting to the new normal.
Adjusting to the new normal.
Image: REUTERS/Saumya Khandelwal
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India’s travel and tourism industry may be heading for a bloodbath as Covid-19 cases continue to rise.

India’s international borders have remained closed since March 22, while domestic travel has been limited since March 25 when the country went into a nationwide lockdown.

Even as most domestic air travel routes have opened now, aviation and tourism experts believe that the country is unlikely to resume international commercial flights before October. And even if overseas flying resumes, they said, it might be a while before demand from foreign tourists revives.

“While the situation is still evolving, we can expect international routes to come back to its pre-Covid levels by mid of 2021,” said Sabina Chopra, co-founder of travel ticketing portal

The tourism sector accounts for nearly 13% of total employment in India, which means the ongoing slump puts over 87 million jobs (pdf) at risk.

“The sharp drop in the number of tourists and foreign visitors have already impacted millions of jobs in the hospitality and travel industry as many businesses are going through a severe cash crunch,” said Sudeep Kumar Sen, a spokesperson at HR firm TeamLease Services. “More than 50,000 tour operators have shut shop as there is no hope of revival anytime soon.”

Already, the aviation industry in India has seen several layoffs. On July 20, domestic airline IndiGo laid off 10% of its staff. And state-owned Air India is reportedly looking to send some of its staff on mandatory leave without pay for at least five years.

Many in the travel and tourism sectors are looking to migrate to other industries in search of a stable income, added Sen. “Survival is the key and…there are opportunities in the e-commerce, education and learning sectors.”

As of July 28, India had reported a total of 1.5 million cases if Covid-19, including 33,425 deaths.

The hit

In 2019, nearly 11 million foreign tourists visited India, and forex earnings from inbound tourism were at Rs2.2 lakh crore ($33.69 million).

The decline in foreign tourists this year will have a disproportionate impact on some states. “Many places in the country are highly dependent on tourism for the local economy, thus it cannot deal with tourism stagnation for long,” said Vinay Singh, hotel manager at Le Méridien Jaipur Resort & Spa.

In 2018, the top five states attracting foreign tourists accounted for around 67% of the total international travellers visiting India.

In 2018, India accounted for 5% of all international tourist arrivals in Asia Pacific Region, as per government data.

“Our 25-30% of overall bookings are attributed to foreigners,” Dharamveer Singh Chouhan, co-founder and CEO of backpacker hostels Zostel told Quartz. “The industry has suffered almost 80-90% dip in revenue since the start of the pandemic and given the direction of the pandemic, it would take a longer time for foreign tourist arrivals to increase in India.”

What’s happening now?

On July 16, India announced travel or air bubbles with countries like the US, France, and Germany. Air bubbles are systems established between two countries that perceive each other to be safe and allow carriers of both the nations to fly passengers either way without any restrictions.

Notably, the countries that India has set bubbles with are among the top contributors to its foreign tourist arrivals.

The announcement gave the industry a little hope. However, when the details emerged, it was not what the sector was expecting.

“The current air bubbles being established by India are not bilateral air bubbles, which means that only one-way tickets are being sold (to the destination countries). Countries, including India, are also imposing compulsory home quarantine which could dissuade travellers who will need to do mandatory quarantine for at least 14 days,” said Urvisha H. Jagasheth, research analyst at CARE Ratings.

Besides, India’s rising coronavirus cases are making other countries sceptical. For instance, India has not been included in the European Council’s list of countries from where travel was allowed this month.

India now has the third-highest number of Covid-19 cases in the world after the US and Brazil.

“Customers across the globe are concerned around safety and flexibility around travel plans and will be more confident travelling to destinations that are less impacted by the pandemic. The same will apply to destinations in India,” said Balu Ramachandran, global head of air business at travel portal Cleartrip.