Coronavirus: Visa suspension may cost Rs 8,500 cr for travel, tourism, aviation sectors

coronavirus pandemic could bring Indian travel, tourism and aviation industries to a halt within next ten days, especially with government suspending visas for a month, a move that could cause an immediate ecomic impact of at least Rs 8,500 crore, according to industry players.

Industry bodies, including Indian Association of Tour Operators (IATO), and ASSOCHAM, foresee job losses in sectors as companies try to tide over situation by removing n-essential work forces and stopping recruitment, while calling government to review decision to suspend visas for a month and allow inbound travel through limited gateway cities.

" ban on travel to India for a period of one month will have a cascing ecomic impact and will le to job losses in entire hotel, aviation and travel sector. We estimate that it will le to direct loss of t less than Rs 8,500 crore," IATO Secretary Rajesh Mudgill told PTI.

Assocham Tourism and Hospitality Council Chairman Subhash Goyal said since outbreak of coronavirus, aviation and tourism industries in India have been versely affected.

"However, we were able to man our expenses and keep staff because some amount of essential travel was going on. suspension of visas last night has come as an immediate blow to entire tourism, aviation and hospitality industry," he said.

Warning of consequences of step, Goyal said,"If visas are valid, within next ten days this travel and tourism industry will come to a virtual stop. It would mean that everyone will cut down costs and terminate n-essential staff and stop recruiting ditional staff."

Expressing similar views, Mudgill said,"In view of staggering loss that entire industry stares at, we request government to consider review of situation after 10 days and also consider giving relief in taxation to sector as it will help in mitigating losses suffered."

Federation of Hotel & Restaurant Associations of India (FHRAI) Vice President Gurbaxish Singh Kohli said,"Since vember, when coronavirus me news, hotel room cancellations began and crossed 80 per cent mark. New bookings are almost completely on hold, including NRI segment which accounts for 60 per cent of tourism revenues mostly in months from April to September."

Yatra.com Co-Founder and COO, Corporate Travel & He Industry Relations, Sabina Chopra said latest suspension of visas from all countries to India is expected to have a substantial impact on foreign tourist arrival in country which was alrey witnessing a drop due to prevailing situation.

"We have received close to 35 per cent cancellation queries from travellers planning ir trip to foreign destinations," she said ding airfares to affected destinations have dropped by 40 per cent.

Chopra furr said,"re has been about 18 per cent drop in hotel rates and we are receiving cancellation requests from various travellers who are wary of taking up trips domestically as well."

According to industry chamber CII, this is one of worst crises ever to hit Indian tourism industry impacting all its geographical segments - inbound, outbound and domestic, almost all tourism verticals - leisure , venture, herit, MICE, cruise, corporate and niche segments.

In an impact assessment of coronavirus pandemic, CII Tourism Committee said to save on variable costs and minimise fixed costs many small and mid sized hotels, resorts and car rental companies are shutting down operations and asking staff to go on leave without pay.

Moreover, working capital of many corporates in tourism sector is seriously hit by almost 60 per cent and for micro, small and medium tourism enterprises by almost 80 per cent, it ded.

"Most of Indian tourism travel and hospitality companies are facing demands for full refunds and y are doing so out of ir cash reserves even for which y have paid vance tax and GST," CII assessment report ded.

report furr said cancellations are "reaching a peak of almost 80 per cent w in March in many Indian locations. value at risk from this segment will be in multiples of tens of thousands of crores."

With India cancelling all visas, chamber said impact "will be worse".

ANAROCK Property Consultants Chairman Anuj Puri said," cancellation of visas for foreigners as well as strong vice issued to Indians to refrain from unnecessary travel will have a marked effect. This is most unsettling healthcare crisis in recent times and hotel bookings will go south."

On Indians being vised to refrain from unnecessary travel, CII report said," December holiday season of 2019 took an estimated hit of almost 40-50 per cent, holiday season of April to July 2020 is likely to take a humongous hit which could be as high as 80-100 per cent, unless re is positive news of progression of virus decreasing.

VFS Global Regional Group COO - South Asia, Middle East and rth Africa, Americas Vinay Malhotra said,"While it is too early to comment on impact of coronavirus on visa application trends, so far, our visa application processes in India continue on schedule as per mandates of our client governments."

MakeMyTrip Group CEO Rajesh Magow said," decision by government will have an impact on inbound and outbound international travel."