Immediate steps required to minimise COVID-19 impact and revive the sector: FICCI - Grant Thornton Travel and Tourism report

Jun 10, 2020

Combination of monetary, fiscal and financial market measures needed to help businesses cope with COVID-19

NEW DELHI, 10 June 2020: FICCI-Grant Thornton Report 'Travel and Tourism - Survive, Revive and Thrive in Times of COVID-19' highlights that there is an urgent need to take immediate steps to not only contain the spread of the virus but also to address the key pain areas of the industry to minimise the impact of the outbreak on the Indian economy and businesses.

The report suggests that a combination of monetary, fiscal and financial market measures is needed to help the businesses and people cope with the crisis. Therefore, to be able to frame correct actions and policy measures, it is important to understand the specific problems. This alone can enable the government to take appropriate measures. The Indian travel and tourism industry has a significant impact on the economic growth of India.

The report highlights recommendations to the central and state governments along with guidance for business across segments in aviation, hospitality, etc. on emerging stronger and leveraging the growth opportunities.

FICCI-Grant Thornton report also reveals the socio-economic effects of COVID-19 on the industry and an urgent need to revive the sector. It highlights the support from the government with respect to regulatory and policy measures including a one-time rescheduling of principal/interest dues in line with the estimated cash flows, direct cash support, waiver of statutory dues as well as the extension of the current six-month moratorium among others.

The report highlights some of the measures for businesses across segments to bring back the consumer confidence and to kick-start the industry with greater thrust on the health of customers and employees.

Mr Vinod Zutshi, Former Secretary, Ministry of Tourism, Govt of India while highlighting the opportunities in the sector said, "We must focus on increasing investment in the emerging technologies and skill development of the workforce which are required for the new normal scenario."

He further added that despite COVID-19 crisis, the government has opened the economy including the travel and tourism. "India is the front runner and we are opening travel and tourism faster than many other countries," said Mr Zutshi.

Dr Jyotsna Suri, Past President, FICCI and Chairperson, FICCI Tourism Committee and CMD, The Lalit Suri Hospitality Group said that as an industry we are optimistic and resilient. "If the Centre and the State governments along with all stakeholders work together, there is nothing stopping the travel and tourism sector to be the front runner to kick start the Indian economy."

Mr Dipak Deva, Co-Chairman, FICCI Tourism Committee & MD, SITA, TCI & Distant Frontiers said, "This is the opportune time for the government to grant export status to the industry under Section 2 (6) of IGST Act for foreign exchange earnings. The benefits from this will make us more competitive."

Mr Ashish Kumar, Co-Chairman, FICCI Travel Technology Committee and Thought Leader said that technology will play an important role in the revival of this sector. "Technology is here to stay. We have to embrace it, love it and revolutionize it, be it emerging or existing technology. It must reach the grassroots level.

Mr Dilip Chenoy, Secretary General, FICCI said that travel and tourism sector has been greatly impacted by COVID-19 and has impacted this sector since the start of the year.

Key highlights of the report:

Grant infrastructure status to hotels to allow them to avail better infrastructure lending rates with access to larger amounts of funds as external commercial borrowings. It will also make them eligible to borrow from India Infrastructure Financing Company Limited (IIFCL). Grant export status to the industry under Section 2 (6) of IGST Act for foreign exchange earnings. Draft National Tourism Policy to aid collaboration between the union and state minister of tourism to develop and promote India to domestic and foreign travellers alike. 6-month moratorium to be extended to a minimum 12-month moratorium period on all working capital, principal, interest payments, loans and overdrafts Permit one-time rescheduling of principal/interest dues in line with the estimated cash flows of each project post recovery from COVID-19 without treating it as restructuring, re-classification/downgrading in asset qualification and requirement of additional provisioning. 12-month waiver of all statutory dues including customs, excise and license fees and increase in insurance premiums Stimulus package to provide salary support to businesses ESI contribution to be deferred for 12 months. Insurance corpus of ESI should be used to provide wages to all covered workers Waiver of GST on products and services offered by the industry for 12 months followed by a standard 5% GST on all products and services till 31 March 2022 Direct cash support for the aviation sector (airlines, ground handling and airports) Waiver of parking and landing charges Short-term, interest-free or low-interest loans for rebuilding businesses in the form of term loans and working capital loans Create a separate Tourism Fund under the aegis of Ministry of Tourism, accessible to the industry as a collateral free, 10 year loan, interest free for the first two years and minimal rate of interest for the remaining eight years to support businesses stabilise in this time of crisis Relief measures for aviation sector, travel agents, tour operators, hotels, amusement parks, ground transport industry. Promote niche travel products under Incredible India 2.0 campaign, beach tourism, greater investment in marketing campaigns Promote corporate travel segment, increase number of tourist trains, development of digital content, investment in emerging technology and local skill development

 

Study

• Travel and Tourism - Survive, revive and thrive in times of COVID-19