Coronavirus outbreak: Travel restrictions impact on domestic tourism may be limited as long as current ban does not prolong

With the government imposing travel restrictions, and state governments adopting preventive measures to checked the spread of virus, the tourism sector hopes the coronavirus outbreak is contained soon

Sulekha Nair March 12, 2020 15:22:04 IST
Coronavirus outbreak: Travel restrictions impact on domestic tourism may be limited as long as current ban does not prolong
  • With the World Health Organisation declaring coronavirus as pandemic, the government has suspended tourist visas to prevent the spread of coronavirus as cases across India continued to rise

  • On Thursday, airline stocks faced heavy headwinds as concerns over enhanced travel restrictions amid spreading of coronavirus infections rattled investor sentiment

  • The month of March is a slack period for travel in India and hence the impact on domestic tourism may be limited provided the current ban does not prolong

The announcement by the government to suspend “all existing visas, except diplomatic, official, UN/international organisations, employment, project visas” until 15 April is expected to impact the travel and tourism sector in India. However, the silver lining is that the month of March is a slack period for travel in India and hence the impact on domestic tourism may be limited provided the current ban does not prolong.

With the World Health Organisation (WHO) declaring coronavirus as a pandemic, the government has suspended tourist visas to prevent the spread of coronavirus as cases across India continued to rise. The curbs go into effect at 1200 GMT on 13 March at the port of departure.

On Thursday, airline stocks faced heavy headwinds as concerns over enhanced travel restrictions amid the spreading of coronavirus infections rattled investor sentiment.

Shares of IndiGo, SpiceJet and the defunct Jet Airways were deep in the red in the morning trade, with SpiceJet slumping over 18 percent, PTI said. The broader market crashed as the benchmark 30-share Sensex plunged over 3,100 points during intraday trade.

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Representational image. Reuters

The tourism sector is among the largest employer in the country. The government’s decision to suspend travel visa will adversely affect the industry and it stands to lose several billions of dollars, said Ramesh Vaidyanathan, corporate lawyer at Advaya Legal, a Mumbai-based law firm.

All domestic airlines, including government-owned Air India, have announced a waiver on re-booking charges in case a customer does not want to travel. Waivers can be availed only if tickets are re-booked 14 days before departure.

Terming the ban a serious blow to the tourism industry, Kapil Kaul, CEO & Director, CAPA South Asia, centre for aviation, said travel restrictions will cripple the industry. It will have a 'very serious impact' on airlines with a weaker balance sheet, he said.

"Q1 which was likely to be a period peak travel has already got significantly compromised. A further demand slump is expected in the domestic sector at least in the next few weeks," he added.

The other sectors in India won’t be affected much due to the travel restrictions as some sectors like tech, for instance, are working with the latest technical inputs—work from home policy, e-meetings Skype, etc.

“The impact of the suspension of the travel ban will be marginal for the tech industry,” said Mohandas Pai, Chairman, Manipal Global Education and former director Infosys.

The major businesses for the tech industry are with the US. People have made contingency plans and the sector won't be much affected, he said.

With the outbreak of coronavirus in China, Iran, Italy, Korea and later the rest of the globe, the immediate impact was felt in India as far as inbound tourism was concerned. With travel restrictions announced by the government, the number of international passengers arriving at the country's airports has reduced to around 62,000 per day from 70,000.

According to Union minister Hardeep Singh Puri, the count might further come down to around 40,000 following the travel advisory issued on Wednesday. There are 30 international airports in the country and on an average, these aerodromes receive about 70,000 international passengers daily.

“The impact was not very evident even prior to the 11 March visa restrictions,” said Alan D'Mello, hotelier, XE Hospitality. Tourists, especially to India, book in advance and are hesitant to cancel/reschedule due to the high fees associated with it. Also, India was considered a 'safe' destination, hence most tourists did not change their plans, he said.

Not many experts and analysts in the sector were willing to put a number to the impact of the latest restrictions on travel. They said that since March is the year-end for some travel firms, the impact would not be much, as long as the epidemic was contained soon in the country.

When things do recover, said Manav Thadani, Founder, Hoteliviate — a hotel consulting firm, it would be with a vengeance. “The next three months will be challenging but it is hoped the epidemic is short-lived in the country,” he said.

Some analysts expect a 15 percent drop in business in the tourism industry annually due to the coronavirus scare and the travel restrictions. “The month of March will take a beating and parts of April will do but hopefully it may not last,” said an analyst.

One of the popular destinations for domestic and foreign tourists in India is Goa. The state has been impacted ever since the epidemic spread through some countries in Asia.

“Though there is not a single case of coronavirus in Goa, the travel restriction by the government will impact our business heavily,” said Savio Messias, President, Goa Hotel Association.

Goa would get three flights a day from UK and Russia, he said. But now chartered flights are not flying into India. The hotel industry in Goa has been having no fresh booking for the last few days. People are afraid to travel, said Messias.

"We have had some calculations. No fresh booking from the last few days. People are afraid of travelling. There have been a number of cancellations of FIT, MICE cancellation. Goa as a wedding destination too is losing its charm due to the coronavirus scare,” he said.

With the government imposing travel restrictions, and state governments adopting preventive measures to checked the spread of virus, the tourism sector hopes the coronavirus outbreak is contained soon. The sector is geared up for a 3-month lull. If the coronavirus outbreak is contained, monsoon tourism is the next season the tour operators are looking forward to.

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