The financial crisis induced by the COVID-19 pandemic has resulted in huge losses for many sectors. The tourism sector is one of the worst-hit sectors which may suffer a loss of $65.6 billion or ₹5 lakh crore in 2020.
The Confederation of Indian Industry (CII) and hospitality consulting firm Hotelivate conducted research and arrived at the likely loss of $65.6 billion or ₹5 lakh crore. The report of the conducted by the Confederation of Indian Industry (CII) and hospitality consulting firm Hotelivate was submitted to the Ministry of Tourism in which it stated that the organized tourism sector is likely to lose $25 billion and the entire value chain linked to travel and tourism is likely to lose around $65.6 billion or ₹5 lakh crore.
The tourism industry needs immediate measures for its revival as the figures are alarming. The expected impact on revenue streams due to shut down and the slowdown is likely to last till October.
The average annual occupancy in hotels was 68%, but the current trends indicate only 30% occupancy in hotels till the start of next year. According to the study, occupancy this year was at its peak in January at 80%, followed by February at 70%, dipping to 45% in March and the lowest was at 7% in April. May, June, July, and August saw 10%, 12%, 15%, and 22% occupancies respectively.
The hotels will likely see 80% to 85% erosion in revenue streams as per the report. The estimated revenue loss for hotels this year for both branded and unbranded segments is estimated to be at $19.13 billion. The estimated loss for travel agents this year for both online and offline mode is $4.77 billion. The estimation of losses is in the worst-case scenario. However, in the best-case scenario, the industry revenue will improve by 10% to 15%.
The Indian travel and tourism industry has received a crippling blow from the coronavirus pandemic. It is one of the worst crises ever to hit the Indian tourism sector by impacting all the geographic segments- inbound, outbound, and domestic and almost all the tourism verticals like adventure, leisure, MICE, cruise, heritage, corporate, and niche are adversely impacted according to the report.
The tourism industry accounts for 9.2% of India`s Gross Domestic Product and employs 8% of the population of the country. The total foreign exchange contribution made by the tourism sector is $28 billion.