Literature Review

LITERATURE REVIEW
The worldwide outbreak of COVID-19 has brought the world to a standstill, and tourism has been the
worst affected of all major economic sectors. Against a backdrop of heightened uncertainty, up-to-date
and reliable information is more important than ever, both for tourists and for the tourism sector.
COVID-19 has represented an unprecedented global, health and economic emergency. Travel and
tourism is among the most affected sector.
According to research done latest by April6, 96% worldwide destinations have introduced travel
restrictions; 90 destinations have completely or partially closed their borders due to the pandemic
situation the whole is facing of Corona Virus. In addition to it millions of Jobs are lost in global tourism
industry. Progress made in the field of equality and sustainable economic growth could be rolled back. If
we look at India there is a revenue loss of Rs. 1.25 trillion as fall out of shutdown of hotels and
suspension of flight of flight operations and onset and continuous growth of COVID-19. If facts are taken
there is 50% loss in January and 70% in March alone.
But if we look at what will be the scenario after COVID 19. As the world slowly turns back to normal it is
very likely that international travel restrictions will linger on to avoid “importing” new COVID-19 cases.
To support their tourism sectors, countries may purposefully restrict outward travel and encourage local
tourism as a substitute. In essence, domestic travel and tourism will be expected to substitute foreign
tourism demand, at least for the time being. For some countries, this will not nearly be enough,
especially in terms of generating foreign currency revenues.
At some later stage, there will first be a slow, gradually intensifying, competition for foreign tourists’
dollars. At the beginning, countries may require a COVID-19 free certificate. However, here is where
potential problems (and a second wave of COVID-19) may be. Even in the longer term, it would be
desirable to have internationally recognized tests and accredited laboratories. To jump start this
process, governments may wish to already start discussing such provisions, including mutual recognition
arrangements, accepted international standards and so forth.
The Federation of Associations in Indian Tourism & Hospitality (FAITH), the federation representing
entities in the tourism, travel and hospitality industry, has appealed over 95 per cent MSMEs of 53,000
travel agents, 115,000 tour operators, 15,000 adventure, 911,000 tourist transporters, 53,000
hospitality and five lakh restaurants are facing the heat due to lack of cash flows.
“The industry is facing its biggest economic challenge with the larger and combined effect of 9/11 and
the slowdown of 2009 and estimated bigger effect than the Economic Depression and World War II,”
said FAITH in the report.
Tourism has always been a significant contributor to employment generation and a huge source of
foreign exchange earnings for the country. This sector not only employs workers in cities but also
provides livelihood to people across social strata in rural areas. But now amid the pandemic crisis
Reports and experts suggest possible job loss across tourism and allied industries due to standstill
caused by the Covid-19 outbreak across the world. “The Indian tourism and hospitality industry is staring
at a potential job loss of around 38 million, which is 70% of the total workforce,” due to Covid-19, a
report by KPMG, a financial services and business advisory firm, said on April 1.
Officials of travel and tourism companies tell a uniformly dismal story of cancelled bookings from
February 2020 leading to “complete paralysis” by mid-to-late March 2020. “The industry has come to a
standstill as the crisis has hit its nerve centres – the airlines and railways,” Ajay Bali, managing director
of the Mumbai-based BCD Travel India, the Indian arm of the Dutch corporate travel management firm,
told India Spend. “And in the next 45 days, we do not even know if there will be recovery.”
A study by CARE Ratings notes that the figure corresponds to a 40 per cent decline in revenue over
calendar 2019.
“During H2 2020, assuming the virus impact subsides, we expect FTAs to still be lower affecting the FEEs
(foreign exchange earnings) by about 50 per cent to reach Rs 56,150 crore vis-à-vis Rs 112,300 crore
during H2 2019," the report said.
Impact on the inbound and outbound passengers is expected to be most severe in the next couple of
quarters. India’s total foreign tourist arrivals (FTA) stood at 10.9 million and the foreign exchange
earnings (FEE) stood at Rs 210,971 crore during 2019, with Maharashtra, Tamil Nadu, Uttar Pradesh and
Delhi accounting for about 60 per cent of foreign tourist arrivals (FTAs). However, now with travel
restrictions in India for over 80 countries and most of the flights of major airlines being suspended,
along with the lockdown till March 31, 2020, the Indian domestic as well as foreign travel and tourism
industry is expected to witness a sharp negative impact in 2020.
April-June, the Indian tourism industry is expected to book a revenue loss of Rs 69,400 crore, denoting a
year-on-year (y-o-y) loss of 30 per cent.

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