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

India's travel and hospitality industry is headed for its worst crisis with an at least Rs 8,500-crore hit in revenues due to suspension of most visas over fears of spread of coronavirus that would result in lower footfalls and drop in business for tour operators, hotels and aviation industry.

Hotels and tour operators have seen a spurt in cancellations particularly after the WHO declared the outbreak a pandemic. Tourists cancelled travel, hitting hotels, airlines and tax collections after the government suspended most visas in a bid to halt the spread of coronavirus.

At least 40 per cent of rooms across big chains of hotels are going empty while banquet bookings have been cancelled, industry officials and associations said.

Tour operators estimate January-March quarter earnings could fall by more than 60 per cent.

India, which annually earns Rs 2,200 crore from foreign tourists arrivals, attracts nearly one million overseas visitors a month, a number which could see a drastic fall next month due to travel restrictions.

Indian Association of Tour Operators (IATO), and Assocham saw job losses in the sectors as companies try to tide over the situation by cutting non-essential workforces and stopping recruitment. They wanted the government to review the decision to suspend visas for a month and allow inbound travel through limited gateway cities.

"The ban on travel to India for a period of one month will have a cascading economic impact and will lead to job losses in the entire hotel, aviation and travel sector. We estimate that it will lead to direct loss of not less than Rs 8,500 crore," IATO Secretary Rajesh Mudgill told PTI.

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

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

Warning of the consequences of the step, Goyal said, "If no 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 non-essential staff and stop recruiting additional staff."
Expressing similar views, Mudgill said, "In view of the staggering loss that the entire industry stares at, we request the government to consider a review of the situation after 10 days and also consider giving relief in taxation to the sector as it will help in mitigating the losses suffered."
Federation of Hotel & Restaurant Associations of India (FHRAI) Vice President Gurbaxish Singh Kohli said,"Since November, when coronavirus made news, hotel room cancellations began and crossed the 80 per cent mark. New bookings are almost completely on hold, including the NRI segment which accounts for 60 per cent of the tourism revenues mostly in the months from April to September."
Chopra further said, "There 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."
The report further said cancellations are "reaching a peak of almost 80 per cent now in March in many Indian locations. The value at risk from this segment will be in multiples of tens of thousands of crores."
ANAROCK Property Consultants Chairman Anuj Puri said, "The cancellation of visas for foreigners as well as the strong advice issued to Indians to refrain from unnecessary travel will have a marked effect. This is the most unsettling healthcare crisis in recent times and hotel bookings will go south."
VFS Global Regional Group COO - South Asia, Middle East and North Africa, Americas Vinay Malhotra said,"While it is too early to comment on the impact of coronavirus on visa application trends, so far, our visa application processes in India continue on schedule as per the mandates of our client governments."