Create a conducive environment that will help India stimulate its domestic tourism demand

18 Aug 2021

COVID-19 is one of the biggest Black Swan events in recent times, with a long-term impact on the travel & tourism industry. The sector, adversely impacted by the first wave, had just begun recovering, only to be hit by the second and a more severe wave that wiped out all the gains which had been made. Tourism recovery is only expected by the second half of 2022, if the current scenario prevails.

Tourism, apart from being one of the fastest growing sectors of Indian economy over the past decade, is integral to the nation’s prosperity. It creates jobs, drives exports, enhances foreign exchange earnings and creates sustainable livelihoods. Therefore, it is imperative to create a conducive environment that will help India stimulate its domestic tourism demand.

Most stakeholders within the industry are facing a crunch and require assistance to enhance liquidity in order to continue operating. Our primary goal should be to focus on keeping businesses afloat until tourism begins to recover. In order to achieve this, measures such as short-term interest free or low interest loans and their immediate disbursals are critical for rebuilding business. Additionally, Tax Collected At Source (TCS) exemption under GST, deferment of annual statutory dues to the State Governments, and charging fixed costs only when premises are operational will provide much needed relief to the industry in the short run.

Moving from the short- to mid-term, the revival of the industry will hinge on domestic tourism, and the measures undertaken to stimulate it. With the recovery of international travel being slim in the foreseeable future, it is pertinent to develop India’s domestic tourism potential. It is an opportunity to elevate the sector – be it the development of infrastructure to cater to current needs, creating new destinations or travel products and marketing. This will help generate further revenue with increased tourist footfalls.

With its rich cultural and historical heritage, geographical diversity and natural beauty – from the beaches of Goa, Himalayan ranges in the North to the palaces of Rajasthan and breathtaking vistas of North-East, India is a haven for travellers. Known for its spirituality, biodiversity and ancient traditions of Yoga and Ayurveda, the strengths of India’s tourism are innumerable, and it is pivotal that we leverage these to help increase domestic tourism in India.

Our long-term vision should be to pave the way to strengthen India’s tourism. This can be achieved through the creation of an Empowered National Tourism Board through a Public Private Partnership model, tapping into the expertise of professionals. This board will be fundamental to the sector’s development and will help move away from a fragmented approach.

The industry needs to be poised in a manner that will allow for a swift recovery. The importance of the industry to the nation cannot be understated, in terms of both employment and contribution towards GDP. It is only with the continued support of all stakeholders that we will be able to surpass the current hurdles and scale new heights to become an even more significant contributor to the country’s economy.

The article by Mr Puneet Chhatwal, Chairman, CII National Committee on Tourism & Hospitality, Managing Director & CEO, The Indian Hotels Company Ltd, first appeared in the July 2021 issue of CII Policy Watch. Click here to read.

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