Most people across the country are fearing for their jobs given the current crisis due to the coronavirus pandemic. The economic meltdown, unemployment and liquidity crunch have harmed almost every sector, but the travel and tourism industry seems to be the most affected.
The travel and tourism industry was already hit by the economic slowdown in 2019, coupled with macro challenges and geopolitical issues. And then came the COVID-19 pandemic that didn’t take much time to shut the entire world down.
According to the World Travel and Tourism Council India Initiative (WTTCII) and the Federation of Associations in Indian Tourism and Hospitality, the coronavirus pandemic could leave over 38 million people jobless, which is approximately 70 per cent of the total tourism and hospitality sector workforce.
Not just mass unemployment, the extended national lockdown could lead to bankruptcies and closure of numerous travel firms. The current scenario is bad, especially in the aviation industry as airlines have had to shut operations. Experts suggest that in the coming two quarters, around 40,000 jobs could be lost.
The Centre for Asia Pacific Aviation India (CAPA India) has said that India’s aviation industry, excluding Air India, will incur losses of up to $600 million in Q4FY20. If the government does not intervene, several Indian carriers would have to shut operations by May or June due to lack of liquidity, the report warned.
Stocks related to the industry have shed over 70 per cent of their gains this year.
InterGlobe Aviation and SpiceJet slipped 38 per cent and 72 per cent, respectively. Hotel stocks like Indian Hotels have lost 50 per cent of its share value, while Chalet Hotels, EIH and LemonTree Hotels have shed 47 per cent, 61 per cent and 67 per cent, respectively.
Thomas Cook stocks have plunged by 66 per cent, BLS International Services has slipped 54 per cent in trade in 2020.
Industry associations have expressed concerns over falling businesses and said that if the impact of the pandemic is not addressed immediately, it could stretch over for years and revival of jobs will become almost impossible. The impact of the deadly outbreak is already being witnessed as job losses and layoffs have started in the sector.
With the rise in the number of coronavirus positive cases, the economy seems to be heading towards a “longterm lockdown”. Several tourism, aviation and hospitality bodies have written to the government for interim relief. However, as the country is already staring at a liquidity crisis, it seems unlikely that the industry could get any assistance from the government in the near term.
(With inputs from cnbctv18)