40% of travel firms may shut down in 3 months

40% of travel firms may shut down in 3 months

Over 80% of travel and tourism companies in the country have lost up to 100% of their revenues.

Over 80% of travel and tourism companies in the country have lost up to 100% of their revenues while 15% have seen a dip of up to 75%. About 40% of them are facing the risk of a complete shutdown in the next three to six months.

A survey by over half a dozen major travel operators has said that a little less than 39% will announce job cuts and an equal number will be forced to consider job cuts sooner than later.

Coming days after the government announced a Rs 21 lakh crore package to revive the COVID-19-hit economy, the online survey with over 2,300 travel and tourism business owners and company representatives across the country over 10 days, revealed about 73% travel companies have deferred salaries, terminated contracts while 67% have cut overheads and a little less than half of the surveyed firms deferred capital expenditure.

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The BOTT Travel Sentiment Tracker survey conducted in partnership with seven national associations including Indian Association of Tour Operators (IATO), Travel Agents Association of India (TAAI), Association of Domestic Tour Operators of India (ADTOI), said they were staring at huge losses and jobs even as domestic flights resumed.

Aviation, tourism and hospitality sectors together employ 50 million people directly or indirectly.

The Federation of Associations in Indian Tourism & Hospitality (FAITH), the body representing tourism, travel and hospitality industries, told DH it had proposed an interest and collateral-free long-term fund for paying salaries and operating costs. It had also proposed a minimum of 12 months of complete waiver of fixed central and state statutory and banking liabilities without any penal and compounding interest.

But they have not been given any of these so far. The RBI has announced a moratorium on loans for six months though.

FAITH and its 10 member associations have been constantly in dialogue with the Prime Minister’s Office, ministries of finance, commerce, aviation, tourism, Niti Ayog, the Reserve Bank of India and chief ministers of all 28 states after the lockdown, Aashish Gupta, consulting CEO of FAITH said.

The survey also said that 79% of firms expect the government to create a tourism relief fund immediately, 68% want GST rates lowered by 5%.

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