The Coronavirus disease becomes an unparalleled and more challenging situation as days grow. Everyone is suffering from the unconquerable plague COVID19 which has brought the world to languish condition. The COVID19 has changed the entire world and has also alarmed the whole economy as well as the company’s utilities. Every economical sector has been much exaggerated from the impact of the COVID19 India epidemic. We have already seen a very heavy impact of COVID19 on the IT industry, the Gold industry, and many other sectors in India. Apart from this, one of the most influenced sectors is the travel and tourism industry. The impact of COVID19 on the travel industry is massive.
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Most of the global and national destinations have been closed for traveling due to the COVID19 restrictions. Millions of travel and tourism jobs cut have been betided in the global tourism industry due to the COVID impact on travel industry. This scenario has become so worse, that this type of heave loss has never been seen in the history till now. The impact of COVID19 on travel industry is also reshaping the Indian economy because the travel industry is considered to be the backbone of India’s economy. Let’s understand how the pandemic condition of COVID19 India or COVID19 world has impacted the travel industry.
Vedant Goel, who is the founder of www.ipocorner.in says, “The Global revenue for the travel and tourism industry was estimated to be $447.4 billion in 2020 but it has decreased approx. 34.7% from the previous year. After the finish of the COVID19 outbreak, a time period of minimum 10 months will be required for the travel and tourism industry to recover well. The travel industry has taken only 10% participation in the contribution of Global GDP throughout the COVID-19 epidemic.”
Impact of COVID19 on Travel Industry – Hrishikesh Kolhapore
To know more about the COVID impact on the travel industry, we talked to an Expert- Mr. Hrishikesh Kolhapore.
Mr. Hrishikesh Kolhapore is the owner and director of K.K. Travels, one of the top Travels and Hospitality Company and the largest fleet operator in Pune. K.K. Travels was established in 1988 by Mr. K.R.Kasar, uncle of Mr. Hrishikesh Kolhapore. K.K Travels started its business with car rental services and afterward, it moved its operations to transportation services for company contracts. At present, the company is having three offices in Maharashtra with a fleet of more than 300 vehicles and also provides travel and hospitality services to national and international destinations. Here are his opinions about the Impact of COVID19 on the travel industry, which India is also facing as a recession in the Indian economy.
Q1. As per your view, what is the impact on COVID19 on travel Industry?
Mr. Kolhapore: As we are also operating our travel business on a large scale, we are also going through a very negative impact on coronavirus India on our business. The huge number of employees are engaged in our business and are dependent on us i.e. around 400 to 500 in numbers including internal and external both. But due to COVID19 India, the situation has become trickier to survive in the travel industry. Almost every sector’s economic activities have stopped due to the decision to lockdown by the Indian government. So, from the past two months, we are unable to pay salaries or wages to our employees and we are not able to pay EMIs as we have run out of funds due to no income.
The trouble is not limited here. In fact, the major issue is to recover indirect expenditures like unexploited vehicle insurance validity, RTO expenses, the validity of other permit documents, electricity bills, and staff salaries. Therefore, according to my view, the travel industry is passing through a direct as well as indirect cost challenge and it’s very hard to survive. COVID19 India has totally made the system of many industries unstable, which has influenced our economic system.
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Q2. What are your views on the future of the travel and tourism industry in India, when most of the companies are shutting down due to the drastic effect of COVID19? Will the tourism sector be able to re-stand after the COVID19 India effects?
Mr. Kolhapore: We have no conception of a bright future of the travel industry against COVID19 India condition, till everything doesn’t come back to its real track and holds stability in the market. One the other side, those who don’t have enough capital to restart their travel business or to recover the losses amid Covid-19, as well as those who are thinking to commence new startup in the travel industry, they all are required to wait at least one or two years to stand back on the same page and to survive for long term. Because due to the epidemic condition of COVID19, the staff have become changed now. People would think twice to travel across the world and will mostly avoid unnecessary traveling. Now, they will not plan anything as before as they used to do at the time of vacation or any event.
Q3. It has been heard that the Indian Government is going to announce not to open any Restaurant or Hotel till October 2020. Is that right? Do you have any views about it?
Mr. Kolhapore: No, it is a false quote. There is no official statement regarding the opening or close of restaurants and hotels till now from the government’s side. Any such news which is being claimed online is a kind of fake news. I also came across similar news but when I verified it, the website which claimed the news was a non-existing website. Even I confirmed it with some Government authority personnel, who clarified that they haven’t given any such kind of order. Therefore, no such orders have been given by the Government to the restaurant and hotel owners in India till now. The decision regarding the opening of hotels and restaurants is still pending. Maybe we can hear some news regarding the extension of closure of these businesses in the near coming time.
Q4. After the huge impact of COVID19 in most of the sectors, what will be the possibilities of job cuts?
Mr. Kolhapore: As we all know that the entire world is facing the tough time of COVID19 world impacts and definitely its adverse effects are going to be worse in the near coming time. As a resultant, we have to fight against the lack of funds and sustain the operational activities of a business by the method of cost-cutting. In this case, if you have limited work, what will be the need of hiring extra people to assign works? Most of the businesses will continue their operations by keeping sufficient employees as limited operations, limited cash, and limited resources will be present. Therefore, job cuts will definitely happen across India and the entire globe. Apart from it, ‘work from home’ is also possible to sustain due to operation cost-cutting in the upcoming time after this epidemic COVID19 India and COVID19 world situation.
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Q5- As we know that the travel industry, being a very competitive industry, is a backbone to the Indian Economy. Will it be able to boost the economy of the nation again in the coming time after the effects of COVID19 India and will it be able to sustain this condition?
Mr. Kolhapore: This is a very tough point to analyze or to give any comments. As I spoke about the transportation part, I can see that there are people who have invested in tour packages, which they were supposed to travel in the month of April or May 2020. Many of the people have booked their flight tickets or train tickets, but as a consequence of COVID19 India, neither the airlines nor the railways are able to operate. No travel agencies or transportation suppliers are able to operate in this pandemic situation. As a result, people are demanding a refund.
This is one side of the scenario which has resulted from the heavy impact of COVID19 on travel industry, where people have paid the money but has got neither the service nor getting the money back. Most of the travel agents are extending the service of the booked tour packages to the customers but are unable to provide a refund right now. Therefore, we can see that COVID19 India has led to a very bad situation for the travel and tourism sector of the nation leading to a bad economy. In the future, it can take time and I see not much sustaining in recent times.
Q6. What do you expect from MSMEs or the Government to do something for the travel or tourism industry to make it sustain after the period of COVID19?
Mr. Kolhapore: For the travel and tourism industry, the Government should only focus mainly on producing a vaccine against COVID19. Because once a vaccine is available, people can start moving without any fears. This can further result in the flourishing of domestic tourism. When the situation comes under control and international flights begin operating after clearing the international boundaries, people can think to fly abroad.
The government should also start providing relief packages to the travel companies and travel agents to bear the indirect expenses and burden of vehicle insurance validity, RTO expenses, the validity of other permit documents, electricity bills, and staff salaries. Lower interest rates should be charged from travel agencies for EMI’s so as to sustain the tough time. This will, of course, help the businesses to sustain and fight this pandemic time of COVID19 India.
The impact of COVID19 on travel industry is massive which has started resulting in many adverse effects such as revenue losses of the travel organizations, company losses, job cuts, and many more negative results. This COVID impact on travel industry is making the travel and tourism sector of India weak and unsustainable for the coming time. The industry needs to re-stand and fight because this sector has been a backbone to the Indian economy from the very beginning, as we have analyzed in this series, sponsored by IPO Corner.
Stay tuned with us to know more about the COVID19 impact on the Indian Economy.