The tourism industry is hurting — not just travel agencies but also guides, vendors and rickshaw pullers whose daily earnings have dried up
SUSHEEL VERMA is operations manager at Janta Travels, a travel agency which has been around since 1977. He says the only time the company witnessed a downturn in business was after the 9/11 terrorist attack in the United States. Back then the dip in bookings lasted only for a few days.
This time around, they don’t know how long it will last and how it would affect their company, which this month has seen only cancellations and zero bookings.
This is worrying. The tourism and aviation sector are two industries which are going to lose out the most in the WHO-declared COVID-19 pandemic. At present, there are 143 countries affected by it with 227,755 (almost 2 lakh) confirmed cases out of which 9,274 patients have died. India has seen four persons die from the virus, with 173 declared cases of infected people.
While a travel ban is an essential step to contain the further spread of the virus, how government tackles the repercussions of the ban will make or break the people working in these sectors. It becomes even more worrying when the economy of a country banks heavily on tourism. World Travel and Tourism Council had ranked India third among 185 countries in terms of travel & tourism’s total contribution to GDP in 2018.
The aviation industry has taken a serious hit, with borders being closed to citizens of countries with cases of COVID-19 and some countries banning all persons except residents and citizens.
India has banned travellers from the European Union, Iceland, Liechtenstein, Norway, Switzerland, Turkey and the United Kingdom from entering India from midnight March 18 local time. on March 19, it has gone a step further and said no foreign flights will allowed to land in India from March 22.
Currently, all tourist visas are suspended and a 14-day quarantine is enforced on all travellers, including returning Indian nationals, arriving from or having visited China, France, Germany, Iran, Italy, South Korea and Spain.
This means Indian airlines, like the most profitable Indigo, have taken a massive hit.
IndiGo’s CEO Ronojoy Dutta on March 19 informed employees about a company-wide top down 5%-25% salary cut in a cost-cutting due to Coronavirus which has caused “an economic storm”.
Earlier, it had said that since February 6, the carrier has had to suspend flights. In its statement on March 12, Indigo said it has experienced a “modest impact from the Coronavirus” in January and February 2020, when it cancelled flights “to China and Hong Kong and reduced frequency to certain other South-east Asia markets. This capacity was redeployed in other markets without having a material impact on our revenues.” Now, however, they say the impact has seen week-on-week, a 15-20% decline in daily bookings.
This was almost a week back. Now things would be worse as they noted that the numbers could change, based on how the situation evolves. And they have.
Their last statement had said that they expect their quarterly earnings to be materially impacted because of the above. “In addition, the rupee has also depreciated sharply which will have an adverse impact on our dollar-denominated liabilities primarily on account of capitalised operating leases.”
The Association of Private Airport Operators (APAO) has even asked the Civil Aviation ministry in a letter to help them out, estimating the trade impact to be $348 million.
Earlier, before COVID-19, Indian Brand Equity Foundation (IBEF) had put the total contribution by travel and tourism sector to India’s GDP to increase from Rs 15,24,000 crore ($234.03 billion) in 2017 to Rs 32,05,000 crore ($492.21 billion) in 2028.
While it had pointed out that earnings from the sector in India stood at $28.6 billion in 2018, it also said the target was to rake in $50 billion by 2022.
But now, companies such as the one Verma works for, is feeling the pain already. He claims, however, that things had already started to go down. “Maybe it was the economic slowdown. But compare our previous months undertaking to this month’s revenue where we have made no bookings, things are going from bad to worse”.
The only job they are now left with, is to refund the tickets that had already been booked by travellers. Their branches in Delhi and Punjab are all feeling its effects. The past couple of months being the peak time for tourism has seen just 25% of booking as compared to the months of February-March in 2019.
The four staffers who were at the office when we visited, with more than a few empty seats, are wondering how long this plight would continue, and what the future holds, saying “agents and airlines are the ones who will be most affected by this virus…”
WORKING FROM HOME
Joseph has been working in the tourism sector for the past 10 years. Presently with a travel company called Exotique Expeditions, with operations in India, Bhutan, Nepal and Sri Lanka, he has been left to work from home.
They have been seeing a decline in tourists since February whereas till January the business and enquiries were flowing in as usual. Since February, they have been bombarded with cancellations and now, this month of March, no bookings, and only cancellations of bookings that have been made well in advance for the coming months of the year.
With the pandemic only threatening to grow before it dies down, no one is taking chances and cancellations are the only way forward. “A lot of revenue has been lost, and even today I’m working from home because there’s not much to do at the office”, Joseph tells us.
But while Joseph is in a managerial position, there are many in his company set up who will not be as lucky for long — they are unlikely to manage their livelihood if there’s no work. Many people, he accepts, like tour guides, would be out of luck. “If there’s no work there’s no money. In our case, we have to pay for those who work for us; we can’t avoid it. But yes, there will be a lot of people out of jobs. I don’t know how long this will go on and how far this virus will spread. And so, of course there will be a lot of job losses”.
He trots out numbers of tourist arrivals. In February-March, they would usually get about 400 bookings on an individual basis – not including the group bookings. It’s now down to just 150 bookings or so.
Asked if he is scared about the future of the company and his own job, he says, “We will get through this”. He just wishes that the virus is contained soon. “Yes the company is facing a lot of problems and a lot of losses but it’s not something that we can control. We have to face it as others are”.
While the tourism, aviation and hospitality sectors for all countries are affected by COVID-19, the effect on employment could be devastating. IBEF’s finding was that in 2019, 4.2 crore jobs had been created in the tourism sector in India, which is 8.1% of total employment in the country.
That’s a huge chunk when unemployment has been at an all-time high. The think-tank Centre for Monitoring Indian Economy had released data showing the unemployment rate as having risen to 7.78% in February. This is higher than January’s 7.16% unemployment rate.
Its report takes into account the months September-December 2019, had shown that the unemployment rate was 7.5%.
The report had then said that it was the seventh consecutive wave to record an increase in the unemployment rate since May-August 2017 when the unemployment rate was 3.8%t.
And as one can see, things are not getting better.
With an already suffering economy, there isn’t good news with COVID-19; Moody’s has also downgraded India’s growth to 5.3% in 2020 due to the virus, its risks and effects.
While perhaps giants like MakeMyTrip may survive, small companies run from one-room offices like that of Decent Travels in Connaught Circus look at a bleak future. Paras, whose father set up this company 17 years back, was sitting in the shop typing on his computer with great purpose. He was in the middle of cancelling flight tickets for a customer. A story repeated in every office in the area inundated with travel agencies.
He tells us that while they are going to keep up with employee payments, for at least “three months, things are not looking good.” What if the pandemic extends to more than that? How would they generate enough revenue to retain their staff?
For now, he can only smile and work hard to help his clients, most of whom are stuck in the United States, while others are in Germany, France and Italy. “There are some that are not too bothered about having their flights cancelled. They don’t have much urgent work here. But there are others who need to come back immediately. One of our clients has been told by the airlines that the only next possible flight would be after March 31. He was supposed to return on March 15. With airlines cancelling due to travel ban, there are many such cases.”
“For us it’s a really bad time with all the cancellations. We are doing extra work with absolutely no benefits. Summer is the peak time for bookings but there are absolutely none.”
With coronavirus cases increasing, the government has also taken the decision to keep all the public monuments and museums — including Taj Mahal and Red fort — shut till the end of this month.
What happens beyond that would have to be seen. Outside Red Fort on Tuesday, March 17, a day after the decision was announced, Patriot interviewed rickshaw drivers and vendors who depend on tourists to make a livelihood.
These self-employed workers are going to be left with nothing, they say, as they have no savings or alternative employment to fall back on.
Dharmender, who sells kulfi, says he used to be able to save a few hundreds from his daily wages, but now there is no chance of that. He was surviving these days on roti and green chillies. Still smiling, he told us he wasn’t sure about what he would do next, but just see how each day goes.
Sandeep, a rickshaw driver says, his earnings came from foreigners, who would come to Red Fort and then hire rickshaws to see the Walled City. Now those earnings have completely dried up.
There were also Mahender Singh, his brother Shurjeet Singh, and mother Taranjeet Singh who commute to the Red Ford every day from their home in Seelampur. That day, they had not yet sold a single copy of their book on tourist attractions. The next few days seem bleak.