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Crises In Global Tourism Industry And Economy Revival Post Covid Pandemic

Tourism in India is a massive revenue generating sector in the country’s economy. Tourism and Hospitality industry in India has been growing at a Cumulative Annual Growth Rate (CAGR) of 14% every year - As per Overseas Indian Facilitation Centre (OIFC), set up by the Ministry of Overseas Indian Affairs and CII.

The sector's direct contribution to gross domestic product (GDP) is expected to grow at 7.8 percent per annum during the period 2013-2023 - India Brand Equity Foundation. The market size of the tourism and hospitality industry in India stood at US$ 117.7 billion in 2011 and is anticipated to touch US$ 418.9 billion by 2022 - Industry Estimates[1].

Tourism industry thrives on the basis of the part of income an individual can spend on leisure, i.e. after all his other expenditures are covered. With the massive hit on world economy due to the effect of the Pandemic caused by Corona virus(SARS-COV-2) which is causing COVID-19 in most cases, the world economy hangs by a thread and 195 million people stand a chance to loose their jobs according to UN”s labour body. With such huge amount of layoffs in light, people will despise spending much on leisure.

Millions of jobs in the global tourism industry could be subjected to layoff due to the Covid 19 pandemic ,this is because the whole tourism chain including hotels, travel agents tour operation, family entertainment industry, entertainment venue and air, road and sea transport have been hit Thus the tourism industry will be worst hit amongst all sectors of the economy as it is dependent on a person who is willing to spend on leisure.

Due to the pandemic worldwide, hotels in India has shut down all its revenue generating outlets e.g. restaurants, banquets, bars temporarily due to Government norms. The workforce that the organization had employed are sent on a paid leave. This is resulting in loss and drain of capital in the organization.

Organizations have stopped purchasing supplies and equipments from the market, which might be a prolonged thing due to the demise of footfall in the industry. This is resulting in less cash flow in-and-out of the organization which in turn is again affecting the economy.

The organizations now have a new add on cost in its budget post its revival and reopening, that is sanitization cost. Everything needs to be sanitized properly every 4 hours now due to WHO guidelines. Considering the size and area of the entire hotel property that is a huge add on in the hotels budget.

Travel industry has two parts -business and leisure. The business tourists are expected to continue to provide business to the industry while the leisure tourist might fade off completely and take years to start providing substantial business again.

Due to the overall demise in the tourism industry and the downfall of footfall in hotels, cruises and other sectors, the employees required to run the business has decreased. Thus there is no need for organizations to hire huge amounts of employees anymore, thus resulting in people loosing jobs. Organizations can trim down their workforce and only keep the best suitable for the job also at a lesser salary than normal. This is due to the increase in the number of people applying for a single position and companies might just take advantage of this to cut down their costs. This will lead in talented individuals in the hospitality sector losing their jobs as well as some accepting lower payments and working without increments in fear of losing their job.

Economy Revival Post Pandemic:

The covid situation has created global crises as the world deals to overcome the crises, 96% of the world wide destination have introduced travel restriction to response to the pandemic. The world travel and tourism council has warned covid 19 pandemic could layoff 50 million jobs worldwide in travel and tourism industry.[2] The country around the globe suffers economic repercussion therein to overcome the crises situation prompt action and effective articulation of policies will play a key role to overcome the situation.

Short term and long term policy drafting will play a key role in quick revival of the standard economy, Employees in an organization are the lifeblood of the organization and post the pandemic situation will help the Hospitality industry and all the standard industry around the world to bounce back the economy.

Integrated action among different world organization would ensure enhanced supply of raw material in the industry it would therein promote hassle free production of goods which would help to generate wealth in the economy.

Increased technological- know How would help the Industry to adapt to the changing industry standard which would help to overcome the situation of crises and propel it to their own benefit, Increased injection of funds by RBI and cautious use of the disaster management fund would play key role to revive the economy i.e. the government can provide incentive to small hotels and ensure hassle free lending to which would work as an encouraging factor for the small hoteliers to serve the needs of the people also would promote employment opportunity within the economy.

The Pandemic has created a great economic repercussion and has impacted all economy around the world, in order to boost the economy to its fullest potential we should articulate formula as per the needs of the present as well as keeping in mind the needs of future generation, to put it in simple words long term sustainable goals [3]would lead to propelling opportunity for the economy.

End-Notes:
  1. Prof S Rajamohan, Principal, Institute of Hotel Management Catering Technology and Applied Nutrition, Chennai,Hotel management All you wanted to know about,(26th april,2020), https://digitallearning.eletsonline.com/2014/01/all-you-wanted-to-know-about-hotel-management/
  2. World Economy Forum ,This is how travel and tourism industry could effect the travel and tourism industry,(26th april,2020), https://www.weforum.org/agenda/2020/03/world-travel-coronavirus-covid19-jobs-pandemic-tourism-aviation
  3. United Nation ESCAP, increasing productivity key to growth and survive of sustainable development in Asia,(26th,April,2020), https://www.unescap.org/op-ed/increasing-productivity-key-revive-growth-and-support-sustainable-development-asia-and-pacific

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